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V o^^A . <-N-~.~-3t, - 3» 'v'' . 



THE 



INDUSTRIAL SITUATION 



QUESTION OF WAGES 



A STUDY IN SOCIAL PHYSIOLOGY 



BY 



■ ^ 

T.^'bCHOENHOF 

AUTHOR OF '^ DESTRUCTIVE INFLUENCE OF THE TARIFF," ETC. 



X"^ k^ 






NEW YORK & LONDON 

G. P. PUTNAM'S SONS 



/ 






COPYRIGHT BY 

G. F. PUTNAM'S SONS 



Press of 

G. P. Putnam's Sons 

New York 



% 



1 



b'1? 



PREFACE. 



The nature of this work needs some explanation. When 1 
wrote the first chapter I had merely the intention of criticising in 
the public press the misconceptions under which the great ques- 
tions of the day were held by the political powers then in control 
of the machinery of government. Not alone did the government 
organs show an incomprehensible ignorance of the true elements 
of price-making in products, but the public press, the legislative 
authorities, the public speakers, showed the same absence of a 
correct understanding of the relations existing between the earn- 
ings of the working classes in different countries and the prices of 
their product. The fact that the American laborer earns more 
than the European, is still taken as an indication of our inability 
to compete in neutral markets, or in our own markets, without the 
aid of an artificial device known as a protective tariff. In all 
these discussions it is usually overlooked that the labor-price by 
the piece is the only price, the only wage value, which concerns 
us. That the labor-price by the piece may be a relatively low- 
one, while earnings are high, has seldom been brought out in the 
reports collected by our official informants. To all students of 
the productive processes prevailing in the different countries, and 
of the labor question in general, the facts relating thereto would 
have been the only valuable contribution the government's organs 
could have added to the literature of the day. 

My own experience of business gave me sufficient insight into 
values of merchandise in general and of the operations all pro- 
ducts have to pass through until they reach the final price paid by 
the consumer. Direct study of the facts opened the lines which 
I have followed up in this book. It seemed to me of first import- 
ance to the formation of correct opinions on the subject at issue, 
that we should know the methods by which production is carried 
on here and elsewhere. To this end I deemed it essential to re- 



in 



IV 



view the great branches of manufacturing industry, principally the 
manufacture of textiles and of metals, which, outside of agricul- 
ture, forms the principal basis of our entire national activity. 

Having once entered upon this work, I felt it incumbent to 
bring out the close connection which production and distribution 
have with each other, and to show the importance of leaving the 
latter as free from restraint as the former. Of not less importance 
was it to show the difference between the value of the product as 
paid by the consumer and the price paid to the producer, as con- 
taining all the elements which contribute to the inequalities exist- 
ing in society. It is clear, however, that this difference is not to 
be viewed in the nature of a forced contribution paid by labor to 
capital, which is the ruling doctrine of socialistic writers ; but as 
due to various elements of distribution, just as necessary and es- 
sential to the well-being of the producer as though he conducted 
these processes himself. The tradesmen of former times were 
producer and distributor in one person. The nailmaker in the 
Taunus villages near Frankfort-on-the-Main, of whom I spoke in 
a previous work, " Destructive Influence of the Tariff," combines 
the two characters to the present day. What work he finishes 
during the days of the week he carries on his back into the neigh- 
boring towns and villages on Saturdays. He is producer, distrib- 
utor, and carrier, and retains all the profits of middlemen and 
transportation companies for his own use. Yet few would say 
that his lot is as good as that of a nailmaker in one of our nail-mills. 
The great lines of activity which modern development has called 
into existence, have of course done much to disrupt old organiza- 
tions of labor. The old landmarks, so dear to those who have 
been reared within their limits, are ruthlessly destroyed. Myriads 
of independent and industrious producers are swallowed up by 
mammoth organizations. Wealth is accumulated by fortunate 
men who are able to control, in production or distribution, the 
labor result of thousands and thousands of workers. But it 
would be useless to proclaim against this great revolution wrought 
by the wheel of time. Great revolutions bring up disturbances of 
balances. The world is thrown out of gear, so to say. But we 
have to get accustomed to changes, necessary results of the evolu- 
tion of the human mind when freed from all restraints. 



That only good can come from this ultimately, though the transi- 
tion period be never so painful, is clear. To show this by a care- 
ful analysis of all the organic elements of production and distribu- 
tion is the aim of these papers, and must henceforth become the 
principal task of Political Economy. I have attempted to outline 
the main parts. I have not given more than a mere sketch. I 
have reserved for a later period the task of following out with 
greater detail and more scientific precision the lines laid out in 
Chapter XI. For the present I must confine myself to these nar- 
rower limits. Many very important features of our development I 
have not even been able to touch upon. Much remains to be ex- 
plained ; many are the fallacies yet to be removed. To this pres- 
ent day the veneration in which capital is held in social physiology 
is extravagant ; equally extravagant the hatred of capital felt by 
socialists and labor agitators. In this connection I will only briefly 
state, that the great cause of misunderstanding lies in the miscon- 
ception of capital. Capital is usually taken as the employer of 
labor. The employer, however, is a person entirely independent of 
capital. He uses capital, either his own, or borrowed capital, or 
no capital at all, and still he is the employer of labor. As an 
employer, as an organizer, he earns all the net profits of enter- 
prise, whether productive or distributive. 

It is therefore evident, that the usual condemnation of capital, to 
which we are treated with equal frequency from platforms and the 
labor press, is meaningless ; as meaningless as the self-glorification 
set up in the opposite camp. The employing classes, however, 
will appropriate to themselves the profit share of organized labor, 
so long as the working classes do not possess the proper skill 
and knowledge to conduct these enterprises to their own and 
sole benefit. The tendency of modern civilization is in this 
direction. But so far we can discover only a drift and a 
world-wide distance. Education and enlightenment are the 
guides to all great forward movements of society, and will lead 
in this instance too. But competition is gradually bringing about 
the improvement in actual conditions, which has been held to 
be only attainable by extreme measures. 



CONTENTS. 



CHAPTER I. 
Our Industrial Situation. 

PAGE. 

Misleading nature of consular reports. Labor price of product and time- 
wages different things. Comparison of prices of American and Ger- 
man mill-products .......... i 

CHAPTER II. 

The Views Entertained at High Quarters Compared with the 

Real Facts. 

Erroneous economic views. Conditions leading to great productiveness . ii 

CHAPTER III. 

Cotton Goods. 

Average productiveness in textile industries of United States, United 

Kingdom and Germany . . . i8 

CHAPTER IV. 

Woollens. 

How intelligent reports on foreign industries ought to be constructed. 
Greater extent of the factory system in America. Machinery. Re- 
pressive influence on foreign commerce of the tariff on wool. Increas- 
ing use of shoddy and cotton in wool fabrics in America in consequence 
of the tariff on wool .....,.,.. 23 

CHAPTER V. 

Silks. 

The true relationship of values here and abroad. Higher cost of American 

silks due to other causes than higher labor-cost . . . . -32 

CHAPTER VI. 

The Loading and Dyeing of Silks. 

Adulteration of silks. English reports on adulteration. Great superiority 
of Continental manufacturers over English and American in skill and 
technical knowledge. Dyeing and finishing ..... 83 



Vlll 

CHAPTER VII. 
Adulteration of Fabrics Largely Due to High Tariff-Taxation. 

PAGET 

Great demand in the United vStates for cheap fabrics. A consequence of 
the great consuming power of the masses. Germany's and- America's 
consumption of dry goods contrasted ...... 48 

CHAPTER VIII. 

Production of Textiles in General. 

The importance of the converting industries — principally in America. 

Labor-saving devices peculiarly American . . . . . 58 

CHAPTER IX. 

Iron and Steel. 

How our prices compare with foreign prices. The inroads which steel is 
making in the puddle-iron industry. A tax upon the material is a tax 
upon work and wages. Our prices cheaper than foreign prices, if the 
higher cost of the raw material is deducted. Competition and inven- 
tion frustrating combination ........ 66 

CHAPTER X. 

Pig-Iron. 

The competitive aspect of its production. The importance of free ore. 

Royalties. The transportation question. Southern iron ... 76 

CHAPTER XL 

The Nature and Composition of Prices. 

The fallacy of the money theory. History of prices. Declining prices 
and great abundance of money. The true price-making factors. In- 
fluence of outside facts on prices and English rents .... 84 

CHAPTER XII. 

The True Value of Our Annual Production. 

The share the different classes have in its distributive value. Agriculture. 
Misstatements. Manufactures. Wrong impressions created by mis- 
use of statistics. Actual earnings of the producers and the distributive 
value of the per capita product . . . . . . .97 



IX 

CHAPTER XIII. 
The Wages Question. 

PAGE. 

Increasing productiveness of labor. Reduction of the proportion which 
labor bears to material in the price of any given material. Cheapen- 
ing of the cost of the product leading to its greater accessibility to the 
masses. Increase of the money-earnings of the masses. Reduction in 
the hours of labor . , . . . . . . . . . io8 

CHAPTER XIV. 

The Influence of Freedom on the Conditions of the Working Classes. 

A historic parallel. Germany in the latter part of the middle ages. On 

guilds and workingmen's associations . . . . . .130 

CHAPTER XV. 

Some Economic Truths Disproven by Facts. 

The fallacy that density of population leads to poverty. The fallacy that 
great competition for employment results in lessened earnings. 
French society of the xvii. century compared to the composition of 
American society of the present time ...... 141 

CHAPTER XVI. 

Application of General Facts to Our Industrial Situation. 

Best European authorities proclaiming American methods superior to any 
others. Ocular proof in American and European employments of 
both elements side by side. American characteristics. Great produc- 
tiveness of labor in general. Universal application of machinery. 
Profuseness of production, necessarily requiring great consumption and 
unrestrained outlet for the product . , . . . . .15c 



Th 



value of the 



CHAPTER I. 

OUR INDUSTRIAL SITUATION — THE ADVANTAGES WHICH CAN BE 
DERIVED FROM A WELL-ORGANIZED, INTELLIGENT CONSULAR 
SERVICE. 

The most ardent believer in the doctrine " America for the 
Americans," will not deny that we are commercially interdepend- 
ent with Other nations. The closest constructionist of protection, 
from the supervising architect down to the humble hod-carrier 
engaged in the construction and maintenance of our Chinese 
Wall, rnust admit that we must look to other countries as pur- 
chasers of our surplus products. Of the aggregate of our agricul- 
tural produce we have, on a fair average, about 20 per cent, to 
spare. The manufacturing nations of Europe are eager buyers 
of our raw materials of manufacture, or of our food supplies. 
The most patriotic American would rather take sometliing in 
return than burn or destroy this surplus product of our husband- 
men. Barring the Pennsylvania school, no one, least of all our 
agriculturists, would consider it good economy. In point of fact, 
we get as much in return as we send abroad. Our wall-builders' 
honest intentions to the contrary nothwithstanding, half of our 
imports consist of manufactured goods. Of twenty articles of 
manufacture, in i860, under a low tariff of an average of 18 per 
cent., $180,000,000, and in 1884, under a high tariff of an average 
of 42 per cent., ^300,000,000, were the aggregate amounts of our 
imports in the same lines of goods. 

Adding duties and expenses collected on imports to their 
foreign cost, so as to bring values to our basis of prices in like 
goods, we were still importing in the fiscal year of 1884 : 

In silk goods, 150 taking 100 as the basis of our manufacture. 

In woollens, 30 " 100 " " " " 

In flax and jute goods, 1,400 " 100 " " " " 

In cotton goods over, 20 " 100 " " " " 

In iron and steel mfcts. over, 25 " ^XQQl^^ 

. -t 



At the same time the home industries in these very lines are 
now going through a period of depression and stagnation, the like 
of which has not been witnessed at any time before, not even 
during the darkest time of 1874 to 1879. 

It will be seen from this that we have to consider very earnestly 
our foreign commercial relations, and that our foreign connec- 
tions, along with all competing price-making factors, must be 
studied from all the points of view which our complex economic 
system presents. We are an integral part of the great world of 
commerce. A policy of exclusion may form the religious belief 
of a few fanatical doctrinaires, but as a matter of fact we are as 
much connected with the outside world as Pennsylvania is linked 
to Virginia, and Alabama or Ohio to Texas. Industrial changes 
in Germany, France, or Great Britain do not affect us any less 
than Pennsylvania pig-iron is influenced by the advent of Alabama 
iron upon Eastern markets. 

The plain fact, that we are still importing at this time, in the 
aggregate, of metals and textiles, as much as, and, if counting 
duties, more by a good sum than the combined imports of Great 
Britain and Germany amount to in the same goods,^ ought to 
prove the utter impossibility of creating an exclusive system by 



^ Imports of 


United States, 


Great Britain, 


Germany. 


Woven textiles, 1884 

Metal mfts. down to pig and bar, 
1884 


130,000,000 
47,000,000 


100,000,000 
40,000,000 


25,000,000 
16,000,000 




$177,000,000 


140,000,000 


41,000,000 



Adding duties collected on these imports, ours exceed by far those of two of 
our most prominent competitors, one of whom admits all these manufactures free 
of duty, while the other subjects them to moderate import duties, averaging on 
the aggregate of imported manufactures about I2|- per cent. 

The account stands then as follows. 



Imports of 


United States. 


Great Britain. 


Germany. 


Woven textiles (millions) 
Metals ... 


Duties. 
64. 
16. 


Total. 

194. 

63. 


Total. 

100. 

40. 


Duties. 

3. 
I. 


Total. 
28. 
17. 


..Million dollars . . . . 


80. 


257. 


140. 


4- 


45. 



any rational or even semi-rational device. On the other hand, we 
are not alone capable of holding our own in the markets of the 
world with our agricultural products, but are under-selling and 
out-stripping pauper countries in their best markets. But what is 
more striking in this field of economic phenomena, we are in 
many branches of manufacturing industries the best and cheapest 
producers, not only able to compete with, but to undersell the 
most-developed and best-equipped manufacturing nations of the 
Old World. In the better grades of cotton goods, brands like 
Wamsutta and New York Mills, we are underselling the British in 
their own markets. It may be said that the cost of British labor, 
approximating that of ours in cotton mills, is not a very striking 
illustration, and that Continental labor being so much cheaper will 
be more difficult to deal with. To this the answer is, that it is 
just this low-priced Continental labor which is guarding itself by 
tariff taxation against the products of high-priced British and 
American labor. Before the German tariff on cotton goods was 
raised in 1879, American shirtings were exported to Germany. 
This, in the teeth of a low rate of wages, and a much longer day 
of toil, and a lesser restriction in the employment of children than 
in Great Britain or America up to recent times, when by a system 
of more rigid factory legislation the employment of children 
under twelve years in factories was prohibited. The keen eye of 
trade, governed by facts and prices, had been making use of these 
chances long before the State Department entered into the busi- 
ness of reporting things which were known, and of not reporting 
things which were little known, but very desirable to know. How 
could it be expected of our prejudiced patriarchs of the old 
regime, of the Bourbons of protection, in the State or Treasury 
Department, to understand that the result of low wages can be 
any thing else but cheap goods and a consequent. flooding of our 
country with these pauper fabrics, and the only remedy a new 
addition of taxes ? How could they be expected to understand 
that the result of high wages and of a high standard of living might 
be cheap goods and a threatening danger to countries of a low 
standard of living and correspondingly low wages ? This is so 
beyond all theories of the very respectable and learned doctors 
and text-book writers that it could not possibly be true, if, alas, 



the facts did not all point that way. Now, I know well enough 
that facts not in keeping with the theories handed down by- 
venerable authority are no facts which a good and true disciple 
of the orthodox school need believe in. I shall therefore bring 
some very positive proofs and official figures, collected by the best 
and most reliable authorities. They may not be absolutely 
correct in all cases, but they are the best that can be had. They 
are collected by official bureaus, which fact ought to be conclu- 
sively convincing to protectionist readers at least. ^ 

The rates of weekly wages in cotton factories stand about as 
follows in the United States, Great Britain, and Germany for 1880 
and 1881 : 



Massachusetts. 
60 hours. 



Great Britain. 
56 hours. 



Germany. 
66 to 78 hours. 



Men 

Women 

Lads 



56.67 to $10.09 
4.38 to 4.90 
2.79 to 2.97 



$5.28 to $8.40 
3.90 to 4.56 
2,16 to 3.04 



^2.38 to 
2.14 to 



54.09 
2.38 



These rates would indicate, if taken by themselves, the utter 
hopelessness of English competition with German cheap labor, 
and of our competition with either. But the reverse is the case. 

On the one hand, we have a descending rate of wages in the 
ratio indicated above, and on the other hand, prices of goods in 
an inverted proportion to the smaller pay of the working people 
of the different nations compared. I have pointed out these 
seeming contradictions in "Destructive Influence of the Tariff" 
and " Wages and Trade " (G. P. Putnam's Sons). But assuming 
the true theory of wages to be this: i. ''That the standard of 
living of the working classes determines the rate of wages ; and, 
2. " That where the standard of living is highest, productive 
power and invention find highest development, and production is 
cheapest," this seeming paradox offered above finds easy expla- 
nation. To be able to bring positive proof for what might other- 
wise be called fantastic reasoning, I requested a friend in Germany 

* I am not at all a thorough believer in the infallibility of the official fabrics 
called statistical reports, but I have verified by comparison wherever there was 
room for doubt. Cogito, dubiio, ergo sum is good doctrine in all that aims at 
human progress. 



to send me a collection of samples of German cotton fabrics, with 
lowest price quotations. I received them a short time ago. 
They are from one of the oldest and best-reputed cotton mills 
of Southern Germany (Mechanische Baumwoll-Spinnerei und 
Weberei, Ettlingen, Baden). They are well-known brands to me. 
Some thirty years ago, when an apprentice, I had to handle them 
so frequently that the numbers and qualities impressed themselves 
sufficiently upon my mind. The prices are somewhat higher than 
they were then. The changes which have taken place in the 
industry here and in Great Britain seemed hardly to have affected 
the Continent. 

Comparing these samples with our own goods of like quality 
and finish, and reducing metre, width and length, to our inches 
and yard measure, and German money to American money, I 
found them to be about twenty per cent, higher than our own 
cotton goods, as may be seen from the list of prices of corre- 
sponding American fabrics. (Both lines of prices reduced to net 
cash.) 



White Muslin. 



30 in. N. Y. Liberty . . . . 
33 " Gold Medal . . . . 

32 " Hill 

36 " Barker Mills . . . . 
36 " Langdon G. B. . . . 

36 " Wamsutta 

36 " Pride of the West . . 

1^ Shrunk 

36 " Dwight Anchor 

Colored Linings. 

26 in. Glazed Cambrics . 

26 " Cambrics 

36 " Silesia 

36 *' " finer . . . . 



Cents per Yard. 


American. 


German. 


4.62 


6.20 


5.40 
6.40 
6.88 


7.00 
7.10 

8.15 


8.50 

9-75 
10.45 


9.90 

11.75 
12.00 


7-75 
8.25 


9.00 
10.50 


4.12 
4-50 
7.25 
9-50 


4.25 

5.60 

8.50 

10.00 



If any thing, I found our goods purer and better, having more 
good cotton to the pound than the Ettlingen goods under com- 
parison. 

In close connection with this I will point to the fact that in 



1878 some of the most advanced cotton manufacturers of Markt- 
Gladbach and neighborhood (the Rhenish Manchester) made an 
inquiry into the reasons why all their cheap labor and extended 
hours do not avail against England's opposite policy. They 
found that long hours are too strong a strain upon the frame of 
the operative, and that shorter hours are economically the cheap- 
est. They formed an association to reduce the daily working 
hours, which at that time yet extended to some fourteen hours, 
but the movement went to pieces from the opposition it met with 
from the majority of the cotton manufacturers. 

I found an occasion to make a comparison of a similar nature 
in metal work lately. A German manufacturer, formerly a resi- 
dent of the United States, lately visited this country. His factory 
works are well situated. The communal lands and forests yield 
such abundant revenue that they not only are sufficient for pur- 
poses of taxation, but frequently yield a surplus to be divided 
among the villagers. The women till the small farms and the 
men work in the factory, except at harvest time. Wages are low. 
Two marks a day is considered good pay. The works employ 
five hundred hands and produce annually $200,000 worth of 
goods. Yet when I received from him a statement 

(i) of the value of materials consumed in this production, 

(2) the amount of wages paid for work, and 

(3) the amount remaining to pay for profit and expenses, 

I found that the percentage allotted to each of these three factors 
is nearly the same as in like industries of our own. From this 
it appears that our labor, being paid three or four times as much, 
must be three or four times as productive as German labor in 
order to arrive at like results. 

Unless this were so it would be incomprehensible that we export 
annually from thirty to thirty-five million dollars in metal goods 
to other countries, where we have to meet this foreign competi- 
tion on even grounds, besides overcoming the higher cost of our 
materials; which are tariff-taxed, while the English at least are 
free. We are sending machinery and locomotives to Liverpool to 
be shipped from there to Buenos Ayres, etc., pay double freight, 
and still undersell Great Britain and Germany either in quality, 
adaptability, or price. 



7 

From the foregoing, it appears that if all things were equal, or 
if the earnings of the working classes alone were to determine 
prices, we should stand little chance in the markets of the world. 
But things are not equal. They are not equal in any two coun- 
tries. Nor do the earnings of the working classes determine 
prices, but the amount of work which they produce for a certain 
amount of pay is the determining feature. It would be very 
interesting for us to know what is equal and what is not — why we 
excel in some of our industrial enterprises, and why we are far 
behind in others. It would be of great value to our industrial 
classes to learn about the modes of production, the kind of power 
employed, whether hand or steam, etc., and principally the amount 
of work turned out by a competing industry for any given amount 
of pay. It would be of interest to know which industries are 
remunerated by the piece and which industries by the day, etc., 
etc., or what proportion of each system of pay is borne by each 
industry. 

It would be interesting to learn to what extent the system of 
domestic industry has made room for the factory system — in what 
branches the former or the latter prevails. It would be of interest 
to learn what number of hands is employed in the different 
countries to produce the same amount of work, etc., etc. 

We have now an extended Consular Service at our command. 
The State Department is publishing reports from our consuls 
at given periods, which contain some very interesting reading 
matter, but very little which goes to the root of these questions. 
Some few years ago feeble attempts were made to enlighten the 
public on these very points. The work on Cotton and Woollen 
Mills in Europe, Commercial Relations of the United States, No. 
23, 1882, has some reports which do full justice to this matter. 
The report of the Consul at Manchester, Mr. Shaw, was as com- 
plete a piece of reporting as could be expected fron any one sim- 
ilarly placed. The conclusions to be derived therefrom, however, 
were so absolute a refutation of all the then orthodox views of 
American statesmanship, that he soon was persuaded to desist 
from reporting things not in keeping with the teachings of the 
holy books of the dominant creed. After this attempt we hear 
no more such dangerous facts as this, that so far as work and 



8 

wages were concerned, our operatives earned more mony than 
Lancashire operatives, but did considerably more work and pro- 
duced cheaper goods by the piece ; that this advantage was lost 
again, however, through the greater cost of coal, machinery, build- 
ing charges, and taxes, etc. A subsequent report from the same 
source tried hard to overcome the impression produced, but 
fortunately this one stands, and what is more, all facts prove it to 
be correct, and that it is the best piece of reporting that has ever 
been published by the State Department. It shows what invalua- 
ble service our consular system can be made to yield to the coun- 
try if in proper hands, properly directed. In the hands of officials 
subservient to the priests of the Pennsylvania deity we shall not get 
more than, for instance, what our consuls in Germany produced. 
Some, like our Consul- General at Frankfort-on-the-Main, extolled 
the beauty of the protective system and the great advantages ac- 
cruing to the empire by its return from free trade to protection. 
The good man did not tell us that in manufactured goods Germany 
always had a protective tariff, and that from 1873 to 1879 free 
trade had only existed so far as cereals, provisions, and pig-iron 
were concerned. As those were being taxed, a compensating 
increase of duties on manufactured goods had to be granted. This 
is the Alpha and Omega of the great protection revival of which 
so much ado was made by our consuls. 

That German manufacturers do not view the new tariff with 
the spirit which our consuls would impute to them, is proven by 
the reports of the German Chambers of Commerce. The manu- 
facturers consider a tax upon their materials and upon the food of 
their operatives a burden, and look with dismay upon any threat- 
ened increase. 

By other representatives of our consular service in Germany, 
the revival of trade coincident with the inauguration of the new 
tariff law was made use of as an illustration of the invigorating 
force of a protective tariff. This is in the line of our home argu- 
ment, which refers all the ills and woes arising from business stag- 
nation, panic, etc., of 1884 to the change (a reduction of an 
average of i per cent.) of the tariff in 1883. The consuls never 
mention the fact that German manufacturing industries were 
never more flourishing than from 1872 to 1875-6, the time of the 



creation and rule of the same free-trade tariff which (in the eyes 
of our consuls) had to do service as a destroyer from 1876 to 
1879. 

What we want to learn is nothing but the truth, the whole truth, 
however. For this men are required who are capable of seeing 
the truth, and seeing the whole truth. To see the truth in eco- 
nomic matters presupposes the training for the subject, an open eye, 
and an open head. There is a great gap to be filled yet. Neither 
the government nor the press have so far supplied a want which 
is daily more keenly felt by all thinking men. I refer to the em- 
ploying of the honest, unbiassed, fact man. Government statistics, 
government research, have so far been influenced too much by 
political or worse considerations. The newspaper office, the 
editor's chair, is an adjunct of the counting-room. The true 
and great facts which underlie the creation of prices and condi- 
tions of product and production, of distribution and consumption, 
are either touched upon in a meaningless or misleading manner, 
or are left outside the scope of inquiry. 

Government might be expected to supply this great want in an 
age when the humblest individual is as eager for the news of the 
day as only the man of leisure was a generation ago. The thirst 
for information is second only to that for food and drink. Eco- 
nomic data, especially of an unerring kind, are looked for with 
growing interest. The importance of publicity as a corrective to 
evils arising in the body politic, in the social organism, in the 
world of trade, manufacture, and commerce, is recognized by all. 
It is admitted that fullest publicity of corporate management is 
about the only remedy which, under our present development, we 
can apply to the many crying abuses which have been practised 
upon us. To-day the railroads of Massachusetts are those managed 
with the nearest approach to honesty to its stockholders and fair- 
ness to the public, mainly by a rigid enforcement of the law gov- 
erning the publication of accounts ; a clear proof of the impor- 
tance of publicity given to facts relating to the movements of great 
interests. The greatest interest which man has in any thing of 
this world, however, is that centring in his own immediate means 
of existence. These are prominently dealt with as subject of 
this treatise. Nothing can be of more interest to workingman or 



lO 



capitalist, employer or employe, than a knowledge of the conditions 
under which foreign countries, with whose labor products we come 
in daily contact, perform their work. In this we might have ex- 
pected the fullest aid and information from our foreign office. 
But alas, what we gleaned from the pages published in monthly 
volumes was not of that nature. Of course for such work a staff of 
competent men is required. Whether the spoils system was able to 
supply this kind of men may be questioned. That this class of 
men must be selected to fill the principal consulates, cannot admit 
of any doubt in view of the immense pressure of the commercial 
and industrial situation. That the services of men of the kind, 
that could and would do justice to these requirements, could not 
be secured so long as the iron and wool combination directed the 
helm, needs no demonstration. To what extent the ruling powers 
were guilty in spoiling even good material is attested by a United 
States Senator, who writes to me from Washington : 

" I am glad you are going to write up our consular system. I 
have information, which I regard as positive, that our consuls do 
not regard their places as safe unless they send reports such as 
will please the ' protection element ' at home, and I have seen let- 
ters from some of them showing how the most valuable parts of 
their reports were cut out after they reached this country, which 
facts I intended to lay before the Senate before the close of 
the last session, but was prevented from doing so by other Sena- 
tors, friends of these consuls, to whom the letters were written, as 
they would lose their places if the truth were told. 

" The consular reports for the last two years, at least, have 
become mere partisan presentations of the virtue of protection." 

The immeasurable benefits which might be derived from a prop- 
erly organized and directed reporting agency are so pronounced 
that little need be said in its favor. But good reporting can only 
be obtained from a thorough mastery of the subject to be reported 
on. The best results can be guaranteed if done through properly 
organized government channels, as government can at all times 
command good services, provided work is not required which 
militates against the self-respect of those intrusted with it. To 
suppress truth, to state half truths, to color facts so as to please 
superiors in office, is not work that ought to be asked of the 
officers of the republic. 



CHAPTER II. 

THE VIEWS ENTERTAINED AT HIGH QUARTERS COMPARED WITH 

THE REAL FACTS LOW WAGES AND LOW LIVING GOING 

HAND IN HAND WITH LOW PRODUCTIVENESS. 

The letter from the late Secretary of State, Mr. Frelinghuysen, 
on ^' Labor in Europe " recently published, has brought out at last 
in full the wage statistics of foreign countries, on which the pro- 
tectionists had been feeding the public for so long a time. The Re- 
publican Campaign Committees during the fall of 1884 made the 
freest use of these statistics of labor, supplied by our consular ser- 
vice, for political purposes in the most misleading manner. We all 
remember the handbills and cards scattered broadcast all over the 
country. True as far as the statistics of the earnings of laborers in 
foreign countries went, the inferences and explanations drawn from 
them were the reverse of what the figurd? really represented. I 
called attention at that time to the fact that things were fully as bad 
as stated ; with the proviso, however, that they were worse where 
the protective policy had the fullest sway, as in Germany, while in 
free-trade England, as by the showing of these very campaign re- 
ports, wages were nearly double those of Germany. 

The letter from the Secretary throws a great deal of additional 
light upon the subject, so far as statistical facts are concerned. 
The letter speaks of the especially abject condition of labor in the 
Taunus and Spessart mountains, in Silesia and Thuringia, where 
the house-industries are still clung to with a tenacity of which only 
the very low standard of living and wages can give adequate ex- 
planation. In " Destructive Influence of the Tariff," and " Wages 
and Trade," I spoke of those poor toilers, a description of whose 
destitution and poverty and mode of living would hardly find be- 
lief among American readers. I feared then I might be suspected 
of exaggeration. I dwelt as little on these facts as possible. It will 
always remain an unpleasant piece of work to draw the curtain 

II 



12 



from the dark misery of the social problem. The true historian 
of his time, however, has no alternative left but to state facts. 
That my facts were not overdrawn is now proved by the State 
Department in this recent publication. Factory labor is better 
remunerated than the labor in the house-industries. With what 
doggedness, however, the working classes cling to the latter system 
and the quasi-independence and higher social position guaran- 
teed thereby, is shown by house-industries of Rhenish Prussia and 
Westphalia, Thuringia, Silesia, etc. 

Alphons Thun, in a work published in 1879 (" Die Industrie am 
Niederrhein "), gave some very interesting information on the con- 
ditions of work and the system of labor prevailing at that time in 
the Lower-Rhine country of Germany. I was surprised at the 
extent to which the domestic system was still prevailing in this 
most advanced industrial part of Germany. In the metal indus- 
tries of Solingen, Iserlohn, Remscheidt, etc., forging, grinding and 
finishing were nearly all done by different small masters, who take 
the work from the " manufacturer " and bring it back after each 
stage to give it to the following procedure. The "manufacturer" 
gets his samples from the master and takes orders wherever he 
can find them. The consequence is a system of under-bidding 
for the markets which presses hard upon the master, who again 
tries to get even by returning slighted or inferior work. Complaint 
is made of needles having no eyes, of clasp knives without blades 
or with blades which don't move, being shipped to foreign coun- 
tries. The truck system, which existed up to 1849 in its most 
disgusting and repelling form, being prohibited, there is still a mild 
type of it virulent now. Usually a cousin or a relative of the 
manufacturer occupies the position of examiner of work returned 
by the workman and likewise that of a storekeeper. It depends 
on the amount of goods taken in lieu of wages whether the work is 
criticised more or less severely or perhaps rejected altogether. 

In Crefeld, the centre of the German silk industry, the same sys- 
tem of industrial subdivision prevails — the conditioner, the weaver, 
the dyer, the finisher, " the manufacturer." Far back into the coun- 
try the silks go out to the handloom-weaver, who, with his whole 
family, in busy times, is at work from early morning to late at 
night, weaving the flimsy thread into all sorts of stuffs. When 



13 

work is plentiful, wages and earnings and living are high. From 
all sides and occupations hands are drawn in to learn the trade, 
and to be workers and earners after a few weeks of apprentice- 
ship. Then the weavers accept good material only for the chain ; 
they are independent and dictate their own terms. But depres- 
sion shows at once the very reverse, and makes suffering the more 
intense, as good earnings in the house-industries are apt to tend 
to increased families, whose members are very early helpers, but 
very undesirable inmates in hard times. Their stomachs have to 
be filled, work or no work. Now, the manufacturers pay reduced 
wages — wh'-- . there is work. Then the whole family go eagerly 
about in their emaciated condition to finish the work, to obtain 
the scanty earnings to buy bread. The " manufacturer," how- 
ever, is exacting now, though he supplies inferior material. By 
greater skill and harder and better work the master has to over- 
come and improve its conditions. We hear then of cases of de- 
ductions and exactions vi^hich would furnish material for a 
counterpart of " Uncle Tom's Cabin." I read of a case in Viersen, 
1877, where a velvet weaver had died still in debt to the manufac> 
turer for an advance on his loom. The widow, who had just 
recovered from a confinement, finished the piece of velvet, and on 
returning the same had the full amount of the debt deducted 
from her pay and was dismissed with just four German pence, 
about one cent in our money ; four hungry children were awaiting 
her return. 

Now 1878 is a great distance from 1885 in this time of rapid 
changes of industrial development, and I had thought that the 
factory system to some extent might have supplanted the domestic 
system. But we find in the report of Consul Potter, of Crefeld, 
published in the Secretary's letter, that ninety per cent, of all the 
silks and silk goods made in Crefeld are made on hand-looms in 
the homes of the weavers. 

The report goes on to say : " This is called * home industry,' 
and its continued existence is threatened by the gradual introduc- 
tion of power-looms, and, of course, factory centralization. Al- 
though the hand-weavers of Crefeld are only enabled to maintain 
existence by long hours and unremitting toil, they will fight for 
their * house-industry ' to the bitter end, the decrease of wages 



14 

and its attendant poverty consequent upon the encroachment of 
the factory system making the fight all the more bitter." 

Then it goes on describing the idyllic beauty and simplicity of 
the weaver's home-life. But I pass this by, and will only point 
out that we have here for the first time an intimation by a consul 
that there may be differences of working methods which may 
make a vast difference in the result. Of course he does not say 
that we may be the gainers in the comparison, but he points to 
facts at least which ought to have been brought to light long ago 
by our authorities. 

In the whole mass of information brought out by the State De- 
partment, we find only one sentence which is an intelligent ex- 
planation of cause and effect. Mr. Consul Smith, of Mayence, 
states : " In Germany less is expected of the workingman ; less is 
paid for, and consequently less is rendered. Conditions there are 
more fixed, and the demand for promptness of execution not so 
imperative." 

This seems to cover the problem so far as Germany is con- 
cerned, and is a fitting answer to the remarks of Mr. Secretary 
Frelinghuysen in the concluding pages of his letter. He says : 
^' It would be a legitimate field of inquiry to ascertain what are 
the conditions which enable England to manufacture machinery 
and other products at less price than similar goods can be manu- 
factured in France, and at prices equal to those in Germany, 
while the rates of wages paid to the workmen engaged in those 
manufactories in England are on the whole higher than those paid 
for similar labor in France, and, as the foregoing table shows, 
more than double those paid in Germany." And, I may add 
here, America, paying higher wages than England, is excelling 
them all in cheapness wherever she has an even chance to meet 
foreign competition. 

The answer is not very difficult. Man is above all an organic 
being. From childhood to the grave he does battle for his ex- 
istence. Every breath of air, every motion of the muscles, is a 
waste of tissue. His food is only so much matter added to his 
system necessary to re-create what is constantly subjected to dis- 
integration. It is the fuel necessary in creating the working 
power which we see turned into labor and production. A half- 



15 

fed or under-fed body can no more produce full results than an 
engine not sufficiently supplied with fuel or a horse half starved. 
If we applied the same rules to the labor question, which no one 
in his right senses would disregard, in these two other categories, 
we should meet with less crudeness in the treatment of the whole 
subject. 

An Englishman eats more and better food than a German, and 
he does more and better work than a German, An American eats 
more and better food than a German or an Englishman, and he 
does more and better work than a German, Frenchman, or 
Englishman. 

I will give the bill of fare of a family of three in a village in the 
Taunus, near Frankfort-on-Main, as witnessed by the author of 
*' Ftinf Dorfgemeinden auf dem hohen Taunus" (Five Village Com- 
munities on the High Taunus) during his stay of three days with 
that family. 

Saturday : Breakfast, coffee and bread with jam ; dinner, po- 
tatoes and coffee ; afternoon, coffee and bread with jam ; supper, 
potato-cake and coffee. 

Sunday : Breakfast, same as above ; dinner, rice soup with 
potatoes and one pound of soup meat ; afternoon, bread with jam ; 
supper, potato-cake and coffee. 

Monday : Breakfast, same ; forenoon, bread and cheese ; din- 
ner, potato soup and bread ; supper, potatoes and coffee. 

I find full corroboration of this by many authors as the rule in 
other districts, and — no wonder — the small earnings would hardly 
permit of more sumptuous feeding. 

This under-fed, half-starved German labor is frequently found 
to produce the saddest results. We find scrofula and hunger 
diseases to an alarming extent. In the Taunus villages and other 
districts alluded to, few young men are found strong enough for 
the army. Italians are employed for the harder work of road- 
building, they being found stronger. The descendants of the 
conquerors of Rome, of the giants whose very appearance made 
Rome tremble, have become so weakened through hereditary 
anaemia, caused by poor feeding, that for work requiring muscular 
exertion they must have recourse to the descendants of their 
ancient foes, who were a byword of weakness to their forefathers. 



i6 

Science has endeavored to remove the question from the hazy 
region of conjectural guesswork. It has been proven that ex- 
cessive hours and insufficient nutrition are not alone a hindrance 
to immediate good results, but do infinite harm of a lasting na- 
ture, in that they sap the best forces of the body. Dr. Jaeger, 
"Die Menschliche Arbeitskraft," says: '* So long as there is a 
sufficient quantity of oxidizable matter (fats and sugar) in the 
body, the albumen in the substance does not suffer from exertion. 
But as soon as the former is consumed, the albumen is attacked 
by oxygen to the detriment of the living substance, whose struc- 
ture is thereby impaired. Upon this rests the damaging influence 
of over-exertion coupled with under-feeding." " The greater," 
he says in another place, " the quantity of albumen in the muscle, 
the greater its excitability in a physiological sense and its elas- 
ticity, the greater its power of endurance, the higher its natural 
capacity and rapidity of working power." " Only if there is a 
sufficiency of recuperation can working and vital power be main- 
tained" (Dr. Heinrich Frankel, 'The Daily Working Time*). 
Roscher, Lujo Brentano, and others might be quoted. Roscher 
says ' " Antiquity has very correctly pictured Heracles, the 
greatest worker, also as an extraordinary feeder." Lujo Brentano 
says : "A steady increase of the wants of the workingmen, aside 
from all other beneficial results, is the safest guaranty of an in- 
crease of their productive capacity." 

Few, who have given close study to this subject, will deny that 
Germany's low wages and low standard of living, coupled with 
excessive hours, are a drawback, and not an advantage to her in- 
dustrial development. Germany has not yet regained the position 
which she occupied in the fifteenth century. Neither her indus- 
trial position nor the general well-being of her working classes is 
now what it was then. Great national calamities have wrought 
her ruin. She is manfully battling upwards. But the way to re- 
gain lost position is not through taxation and low wages. We 
may admire the plodding patience, the deep sense of duty, the 
courageous endurance of her working classes, and may draw 
many a fruitful lesson ; but let us be watchful agai-nst the heresy 
that low wages mean cheap production. 

In the following pages I shall endeavor to prove, as fully as pos- 



17 

sible with the present means of statistical inquiry, that countries 
whose productiveness of labor has attained the highest potency, are 
those whose earnings and wages are highest ; and that, inversely, low 
wages and low productiveness go hand in hand. I shall, to this end, 
treat the great branches of national industry separately, and re- 
view the same as they appear under the working methods of com- 
peting nations. It will be seen that the views formerly expressed 
on the situation by our consuls to the State Department, were 
widely divergent from the stern facts of reality. In truth, by the 
misconception of the true state, the service adds to the difficulties 
of our position by fortifying the perverted notions of our law- 
makers with apparently logical support, which, if scrutinized, 
would prove the reverse of what the consuls attempted to convey. 



CHAPTER III. 



COTTON GOODS. 



In "Wages and Trade " I brought out a table of the raw ma- 
terials consumed in the textile industries of the United States, the 
United Kingdom, and Germany, and of the number of hands 
employed in each industry in each of these countries. A division 
of the amounts consumed by the number of hands employed 
gave these results : 

PRODUCTIVE CAPACITY OF ONE OPERATIVE IN THE UNITED STATES, GREAT 
BRITAIN, AND GERMANY, TAKING lOO AS THE UNIT OF THE UNITED STATES. 





Cotton. 


Wool. 


Silk. 


United States .... 
United Kingdom .... 
Germany ..... 


lbs. 

lOO 

67 

27i 


lbs. 
100 

77 
60 


lbs. 
TOO 

68 



The tables were reprinted by the London Times, and from 
there found reprint in the press of the United States and 
Germany. 

Statistics of this kind, however, need some explanation. 

The average reader is apt to take them without questioning their 
meaning. To the economist they mean, that in wool, 100 lbs. in 
America may be an entirely different thing from 100 lbs. in Ger- 
many or England. The same quantity may be counted in a 
condition not yielding by a good deal what it yields in other 
countries, as is the case in American wools. In silks a similar 
objection may be raised against my method of testing national pro- 
ductiveness by a division of the number of operatives employed in 
the industry with the pounds of raw silk entering into consumption. 
The pound of silk may be used in costly fabrics, consuming much 
time in their production, while other silks may be used for plain 

18 



19 

work entailing far less labor, consequently allowing more silk to 
be handled by the same number of operatives in a given time. 
None of these objections however can be raised so far as the 
cotton industry is concerned, or certainly only to a very limited 
extent. 

The gross statement above, of course, shows in a very striking 
manner the superiority of American work and organization. The 
low productiveness of German mill-hands compared to American 
work, as illustrated above, would be difficult to believe, if we had 
no other proofs. In a report on the spinners and weavers at 
Ettlingen by the consul at Mannheim, of which I spoke in a for- 
mer letter, we find i,ioo persons employed on the premises. 
Had the consul stated the amount of raw cotton consumed, we 
could have computed the productiveness of the help. We might 
have had an explanation why the average weekly earnings of a 
mill-hand are not more than $2.16 (^2,380 is given as the pay-roll). 
Standing by itself the statement leaves the impression that pauper 
labor at $2 a week is a dangerous competitor against New Eng- 
land labor at the average of $5 a week, as in the census year. 
But, judging from the size of the mill as known to me, I do not 
think that an American mill of the same extent would use one 
half of that number of people and would turn out more goods 
into the bargain. The great number of people employed in the 
cotton industry of Germany is rather startling in its meagre results 
when brought in comparison with the great output of American 
cotton mills. 

Germany's consumption of raw cotton is about 300,000,000 lbs., 
with 250,000 people returned as employed in specific cotton in- 
dustries, while America's consumption in specific cotton industries 
is 750,000,000 lbs., with only 172,000 workers. 

Cotton, as said before, is an especially suitable field, as this is 
the only industry in which the nature of the stock is not materially 
difi^erent in either country, as might be the case in silk or wool, 
and as factory labor is the labor chiefly employed in it by all 
manufacturing countries. Germany, however, still has a very 
large number of small establishments in the cotton industry em- 
ploying under five hands. These are counted in in the grand total 
and somewhat modify the above given result. In 1875 there 



^u 



were 1,597 spinning establiBhrnenta employing 66,675 l^ands ; of 
these, however, there were 1,079 eHtablishinents employing only 
],477 hands, while 518 factories enii)loyed 65,198 liands. In 
weaving, 1,108 factories employed 70,437 hands, while there were 
besides 96,480 establishments returned with 133,052 hands, 'i'he 
consumption of cotton was at that time not more than 250,000,000 
lbs., and if we take the 135,635 persons em[)loyed in factories 
alone as engaged in the work of turning into cloth and yarn the 
entire 250,000,000 (not counting at all any share in the turning 
process of this raw material which the 134,529 persons engaged 
in house industries might have in it), the inoductive capacity of 
German mill-hands in the cotton factories would not exceed 1,800 
lbs., against 4,350 lbs., as the yield of American factory opera- 
tives. In neither of these statements have I included any hands 
engaged in dyeing, finishing, knitting in hosiery or other small 
cotton industries, but simply those engaged in the specific cotton 
industry. 

Comparing dermany':, itroductivencss with that of Massachu- 
setts in s[)ecific- cotton industry by the ninnber of spindles and 
looms and the number of hands employed in operating them, we 
get tlif following results : 



Gerinnny . 
Massuchusells 



No. ut 

HpilUllt-H. 
Ouu oilliLltuI 



•1.7"" 



No. of 

limmH, 
iiou oiuilttJtl 



B4 



Na, of 

litiiuls. 

uau omitled 



No. of 

H|iii)(lleH 
to luu IiuiuIh 



No. of 

loOIIIH to 

100 tmiutH 



• J'- 



2,740 
^.7t>3 



6a 

153 



According to this, 100 operatives operate fully two and one half 
times as many looms and spindles in Massachusetts as in 
Germany, and this showing corresi)onds accurately with the rela- 
tive ])roportion of pounds as given above — viz., 1,800 lbs. meas- 
uring the productive capacity of a German mill-hand, and 4,350 
lbs. that of an American. 

To our capacity of competing favorably with England, I have 
refered in Chapter 1. As to France, she fortifies herself by 
discriminating duties against our cotton manufacture.s, — a for- 
midable pi oof of luM incapacity to combat our staples on even 
terms. 



21 



For our comparison, however, the exhibit of Germany is fully 
sufficient. It is a convincing demonstration of the working 
capacity of the two kinds of l;d)or : that of the United States, 
representing the best-paid labor; nnd that of Germany, represent- 
ing, under like working methods, and considering the necessities 
of civilized life, the poorest-paid labor in Europe. 

And yet with all these facts before us, of course never clearly 
broiigiit out, the late Secretary of Slate in his letter says : 

"The textile manufactmcis <>f I'Uuope, in their active competitioa with 
each other for leading positions in the valuable markets of the United Stales, 
have brought about an increased production and an annual decrease in the price 
value of their fabrics, and consequently the increase in the quantities imported 
is relatively much Jar^^er than in the values. This decrease in price and In- 
crease in (juantily have Iheir inlhK'iice in regulatinj^ llie wages in our mills, 
whicli must manufacture fal>rics and phirc Ihem on (Ik- domestic market as 
cheaply as tlie foreign manufacturers." 

And this is said when we have duties on cotton goods of 40 and 
fifty per cent., duties more than twice as high as the whole labor cost 
in cotton goods amounts to, which according to our census is, with 
all our high-priced labor, 29 labor and 71 material. As the duty 
is collected on the combined cost of labor and material (assuming 
that the relative labor proportion in Europe were as high as here), 
the duty collected would cover the foreign labor cost of 29 by 
138 or more than four times, counting the duty as 40 per cent., 
which it frequently exceeds very largely in some fabrics. Uut in 
goods which we have firmly established here we could remove all 
duties at once, and we would not import a yard so far as prices 
are concerned. What wj import now are not any specialties of 
ours, which we produce on our 11,000,000 spindles when we have 
work for them. What we do import are goods in which other 
nations have peculiar adaptation by cheap hand labor, such as in 
cotton velvets cutting the pile, or in embroideries, laces, curtains, 
netting, or fme light fabrics, when we have not been able to spin 
the yarns, though we have tried it by imposing high duties on 
them, at the rate now, even after the reduction of 1883, of from 
41.29 to 51.84 per cent. This is protection with a vengeance. 
England has jjarticular advantages in yarn spinning. The long 
training of her operatives and especially climatif: jufluctnccs in fine 



22 



cotton spinning are recognized by all the world as factors which 
cannot be circumvented. Germany and France import yarns 
largely from P'ngland, and use them in weaving their finest fabrics, 
which we are prevented from doing by a stupid tariff, and are 
compelled thereby to import the finished article ready made. 
This we call protection. Prevention would be a more fitting term. 
No government report can alter this — that our commanding 
position in the cotton industries of the world is to-day an acknowl- 
edged fact. Our export trade is growing slowly, and if it is to-day 
only $12,000,000 against $11,000,000 in i860, a quarter of a cen- 
tury ago, we have to thank our government for this state of 
affairs and the preventive measures by statute. Our cotton manu- 
facturers and operatives have long ago solved the question of free 
trade and protection. Every shipload of cotton goods consigned 
to China, every bale going to England or Holland, every case 
which has to meet in sharp competition *' the pauper labor of Eu- 
rope," is a most potential argument for free trade and against 
governmental interposition, an argument which could not be im- 
proved in its force by the sublimest piece of oratory. 



CHAPTER IV. 

WOOLLENS — SHOWING HOW CONSULAR REPORTS OUGHT TO BE 
CONSTRUCTED, TO BE OF ADVANTAGE TO OUR INDUSTRIES. 

A GENTLEMAN of the very highest authority in textile matters 
writes to me : " The consular reports, while they give a great deal 
of valuable information, finally fail of their true purpose because 
they give no results — that is to say, no clue by which it can be 
determined how far the rate of wages indicates the cost of labor. 
For instance, one of the consuls did give the conclusion, and this 
made his report the only one in a particular volume that was of 
any real value. Treating the conditions under which a common 
woollen cassimere is made in Belgium, he gave an exact descrip- 
tion of the machinery and its cost, which was a little higher than 
the same machinery would have cost in this country. He gave 
the product of the machinery, and its kind, which did not vary 
materially from the product here. He gave the rates of wages, 
about half what they are in this country, and the condition of the 
laborers not half as good as in this country. There he might 
have rested, and his report would then have been as perfect as the 
rest, but he added the number of laborers required to operate the 
machinery. This gave the key to the whole condition. There were 
two and a half working people in that mill to one in New England, 
and, although the rates of wages were lower, the cost of labor was 
higher ; still the mill had a huge advantage over New England, 
for the reason that all the materials used in it were free of duty. 
A unit could be chosen in every consular district similar to the 
unit of the common cassimere. For instance, in Lancashire, any 
specific kind of cloth made in a large way ; in Scotland, the ton 
of pig-iron or the staple tweed ; in Bradford, a given variety of 
worsted goods ; in Germany, a dozen stockings or some specific 
article of woman's dress goods made of wool. Each of these 

23 



24 

being fully described, after the manner of the consular report of 
the woollen mill in Belgium, would give a clue to the actual con- 
dition and to the actual cost of labor, and would fully explain why 
the high wages of Great Britain are consistent with a lower cost 
of goods than can be found anywhere on the Continent." 

The same authority states that under the administration of the 
State Department under Mr. Evarts forms were prepared by him 
which covered the above subjects of inquiry, and, if they had 
been transmitted to our consuls with instructions to report only 
what came within the reach of the plan laid out, results would 
have been obtained of a highly satisfactory character. Nothing 
came of it, however, and the plan referred to was probably pigeon- 
holed under the succeeding administration. 

As to the specific application to woollens, the turnout of mill 
hands in France may be of service in this inquiry. I will cite the 
report of Mr. Consul-General Walker of June, 1882, in Consular 
Report No. 23. His report is exceedingly valuable, and contains 
a great deal of useful information, but, the great pity, almost all 
final points referred to above are left out. Once in a while, how- 
ever, we get at the number of hands and the quantity of work 
produced. It is further to be regretted that most of his statistics 
go back to 1869 and 1870, and are most likely taken from reports 
of government commissions under the imperial government. 
As France, however, is not a country of very rapid changes in 
economic matters, the figures may serve our purpose. 

I. A spinning-mill at Roubaix has 11,000 spindles, 22 self- 
acting mules ; 250 hands earn Ji 11.76 day wages, or 45 cents, and 
turn out 600 kos. or 1,344 pounds of carded wool yarn. As there 
are 30 dyers employed in the establishment sharing in these wages, 
this yarn is to be taken as dyed. The wool, however, enters the 
mill in the scoured condition, as there are no washers or scourers 
enumerated. We have here a statement which permits us to 
draw comparisons, although we know nothing of the quality or 
number of the yarn : 220 engaged in spinning 1,344 pounds of 
yarn (including carpenters, engine-tenders, and firemen) ; 30 en- 
gaged in dyeing 1,344 pounds of yarn. One hand turns out 6yV 
pounds of yarn spinning at a cost of 44 cents or 7^ cents a pound, 
and 44 pounds of dyeing at a cost of 53 cents or i^ cents a pound. 



25 

This brings the outlay for labor per pound to about S^ cents a 
pound, and comprises nothing but simple rough mill labor, without 
counting the cost of coal, etc., or the labor of employes or overseers. 

From reports like this one we could easily draw conclusions 
and make comparisons if we knew, for instance, the exact nature 
of the yarn spun. The machinery used is mostly all English ma- 
chinery. Neither English nor American spinners would have so 
vast a force at work to turn out so small a product. 

In dyeing no such force would be required in America as in 
Roubaix. One of our most skilled dyers, a gentleman who stands 
at the head of his art in this city, tells me that four dyers and two 
helpers would dye and make ready for the market with greatest 
ease i,ooo pounds of yarn a day, and that 1,200 pounds is a fair 
estimate of a good day's work. The pay here would be $15 a 
week for the dyers and $10 for the helpers. Let us see how the 
labor cost of $15 dyeing compares with ^3.18 dyeing : 

Dyeing at Roubaix 1,344 pounds a day, 30 dyers, at a cost of . . $15.92 

Dyeing in America, say 1,200 pounds a day : 

Four dyers, at $2. 50 $10.00 

Two helpers, at $i.66| 3-33— $13-33 

Taking 10 per cent, off Roubaix to reduce the quantity to New 
York's quota, we have $14.32 against $13.33, ^^ still a small mar- 
gin in favor of American labor to make up for a possible excess of 
estimate. Of course, comparisons like this must not be taken as 
absolutely conclusive in all their details. The French, taking 
more time, produce better and richer results. The fact, however, 
that hundreds of thousands of yards of foreign dress goods are 
imported annually in the gray to be dyed here in American dye- 
houses shows that we are pretty well advanced in the arts, as the 
colors we produce in French cashmeres have to sell with the best 
French — a fact which goes far to prove that it requires not alone 
good dyeing, but also good materials in the fabric that is to be 
dyed to insure success. All our tariff stipulations have not yet 
succeeded in making American wools fit to be used in fine woollen 
dress goods. They may make a good-enough article as far as it 
goes, but it is not the soft cashmere that is wanted, and whatever 
is made here successfully to compete with foreign goods is made 
of the same foreign, mostly Australian, wools. 



26 

2. Take a mill at Elboeuf producing 100,000 metres of plain 
woollen cloth (reduced to American weight and money) : 

{a) Material: 75,625 pounds of fine German \vool at 8if cents . . $63,062 
75,625 pounds of other wools at 45|- cts. . . . 34,834 

151,250 pounds shrinks to 121,000 pounds, value . . $97,896 
Cost of coal . . . . . . . . . . . 3,532 

Cost of other materials . . . . . . . . . 9.107 

Total materials ......... $110,535 

{&) Labor: Washing, dyeing, sorting, etc., of the wool; spinning, 
weaving (power-looms), fulling, dressing, and finishing 263 hands, 
annual earnings ......... $41,937 

The average labor per year is $159, against America of $298, in a 
year of equally full employment. The respective percentages of 
material and labor, however, stand as follows, taking 100 as the 
product (no account being taken in either case of expenses, profit, 
wear and tear, or interest). We have for France, material, 72 J ; 
labor, 27f ; for America, material, 79 ; labor, 21. In the French 
mill 263 hands work up 151,000 pounds of wool, or 580 pounds 
per head, while ours work up 1,640 pounds per head. 

There is, however, this to be said, that the French work up 
finer stock and put proportionately more work into Elboeuf goods 
than we put into our general line of woollens ; but both being of a 
higher grade, it would seem that the two relative degrees (stock 
and labor) balance each other. Our wool, on the contrary, en- 
ters in a less-advanced condition into our mills, and would lose 
considerably in conditioning it for the first processes of manu- 
facture. On the other hand, however, the French mill uses 
nothing but pure wool, while our material (taking the whole 
annual production as our part of this comparison) is very 
largely increased by the addition of shoddy, hair, cotton, etc., 
which addition to the bulk would fully compensate for the loss 
the wool sustains in scouring, and being all worked by the same 
total of hands in woollen mills would closely bring up the genefal 
productiveness to the weight in wool quoted as being worked up 
by an American woollen-mill hand. (Counting all spinning mate- 
rials used in woollen mills, such as shoddy and cotton used in mixed 
textiles, and dividing them per capita, 3,406 pounds would indi- 
cate the productive capacity of American operatives against the 580 
pounds of fine wool worked by French hands, noted above.) 



27 

On the whole, the greater product of an American operative is 
obvious from both systems of computation, and their larger 
earnings are fully explained. It may safely be said from 
what appears from the facts stated, that, throwing all benefits 
of any doubt into the foreign part of the scales, so far as the 
labor cost of such woollen fabrics which can be manufactured 
here is concerned, it does not exceed the foreign-labor cost to any 
very large extent. Whatever can be done by machinery is fully as 
cheap. The higher earnings are balanced by larger product. The 
differences against us in fine all-wool fabrics seem to lie mostly in : 

First. — The greater cost of wools by means of tariff taxation. 

Second. — The greater cost of hand labor, wherever it has to be 
used extensively to give the finish to the goods. 

When, as in our woollen production, the material counts more 
than three quarters and mill labor not one quarter of the com- 
bined value, and this one quarter can be proven to be far more 
productive than foreign labor, then it is clear that the differences 
must be looked for in other directions than the higher cost of our 
labor, which higher labor cost is usually given in explanation of 
the large importations of woollens taking place all the time under 
a tariff protection of 75 per cent. The suggestion of Consul 
Frisbie, at Rheims, in warning against the Cobden Club and its 
unholy mission, is not at all sufficient to explain the conundrum. 
Free wool and an average tariff of 25 per cent, would be a far 
more effective preventative against the danger of foreign woollen 
inundation than our present 75 per cent, tariff and taxed wool. 

Considering the heavy duty on raw wool — all the way from 
about 40 to ICO per cent. — while duty-free with all competing 
nations, we need not go far to find the cause of our inabilities. 
There is, however, another point which is the strongest argument 
for free selection of wools all over the globe, unhindered and un- 
trammelled by any law. First, the influence of soil and climate 
upon the growth of the fibre. This cannot be transported. 
Even breeding cannot overcome natural impediments of this 
kind. 

The alkaline soils of most of our Western Territories give 
wools which are ill adapted to compete with the soft, elastic 
staples of other climes. But, aside from this, the nature of wool- 



28 

selection is more determined by fashion than any thing else. The 
industries of all countries are affected by her whims, even those 
with free wool. How much more we, with a custom-house fine 
of lo cents on each pound of wool imported and of 20 to 25 cents 
extra fine on the dirt and grease which has to be washed out of 
the bulk before the wool can be put on the cards, and for each of 
which two pounds of dirt and grease full freight has to be paid 
into the bargain. For the last seven or eight years soft fabrics 
have been in fashion, and goods made of lustre and combing 
wools, in which England has always predominated, were in small 
demand, so that wools of this kind declined considerably. Lincoln 
hogs, which in 1872 commanded 55 cents, were worth, January, 
1884, only 19J cents, and now under larger demand are 21 cents. 
English exports in woollens, worsteds, and yarns, which in 1872 ^ 
were $190,000,000 had declined in 1880 to $100,000,000, and now 
for 1884 they have risen again to $120,000,000. While England's 
trade was declining, Germany and France, who had always had 
their greatest specialties in soft fabrics, were corresponding 
gainers. But now we find from both countries complaints of de- 
pression, which can be largely referred to this changing demand 
for worsted and hard wool-fabrics. Now, if countries who have 
the unlimited survey over all the wool fields from Lincolnshire 
and Sussex, and from Canada to Australia, and can land their 
wools at their doors at the same price as the English spinner plus 
the trifling charge of extra carriage, are subjected to this pressure, 
how much more must our wool manufacturers be suffering, who 
by stupid laws are limited to our unserviceable staples, or have 
to pay frequently as high, if not higher, duties on foreign service- 
able wools than the duty on the fabric amounts to. 

How our wool tariff obstructs trade and at the same time causes 
our woollen industries to stagnate while they might thrive and pros- 
per but for the want of foreign wools, has never been more graphic- 
ally described than by our consul at Sydney, New South Wales, who 
but gives the views of all those who have studied the situation in 
which the American woollen industry is placed. I cannot improve 
the description, than by giving in full his own words on this sub- 
ject from his letter to the State Department, of Feb. 17, 1885, 
printed in the March No. of 1885. 

* The heaviest export year. 



29 

" The people here complain that it is not just to expect them to 
purchase goods and wares from the United States, when wool, the 
chief product of Australasia, is almost excluded from the United 
States market on account of the protective duties. I believe, 
however, if a better knowledge of the character of the wools 
grown here existed in the United States, that the trade would be 
much larger than it is. 

"The Australasian wools best suited for the United States mar- 
ket are chiefly of light, sound, shafty fleece. These wools are usually 
produced in the south and southeastern Riverina districts, in this 
colony, and in the upper Murray district in Victoria. Austral- 
asian wools are, as a rule, soft-handling, fine-haired, and silky. 
These properties are mainly due to climatic influences, although 
the natural pasturage of the interior has without doubt assisted in 
developing these characteristics. Some of the high grades of 
wool grown in the United States compare very favorably with 
Australasian wools, but, as a rule, the American wools are harsher 
and are wanting in elasticity and fitting properties. 

" The modification of the present duties on Australasian wools 
would undoubtedly give a great impetus to the commerce of both 
countries. The United States would then draw more largely than 
ever on the colonies for all wools suitable for fine and superfine 
cloths and ladies' dress goods. There is no question about the 
American manufacturers being able to produce fine cloths and 
ladies' dress goods of equal quality and finish to those of the 
most celebrated mills of Europe, and yet on account of the duty 
on Australasian wool the American merchants are obliged to im- 
port the great bulk of these articles from England, France, and 
Belgium. 

" In the event of the reduction of the duties on Australasian wools, 
or of the admission of that class of wools peculiar to this country, 
and not grown in the United States, the American mill-owner 
would soon be in a position not only to undersell in his own mar- 
ket all woollen fabrics of a foreign make, but to compete success- 
fully with other woollen manufacturing countries in the various 
markets of the world. At the same time the American flock- 
master would not experience any loss by the change in the tariff, 
as the wools imported would be of a different quality from those 



30 

which he is able to produce. The advantages resulting from such 
a change would also be very great to Australasia, for there would 
then be a keener competition than at present for those classes 
of wool especially adapted to the American markets." 

The whole situation is reflected as in a mirror by this graphic 
description of Consul Griffith. 

Under such circumstances it will surprise no one that, in spite 
of our superior working capacity, our woollen industry is a declin- 
ing one, while the importations of woollens of foreign manufacture 
have been constantly on the increase. All the facts related above 
find prominent corroboration by comparing the woollen manufac- 
ture as illustrated by the census exhibit of 1870 with that of 1880. 

1870. 1880. 

No. of Establishments 2,891 i.ggo 

Sets of Cards . 8,366 5,961 

Lbs. Domestic Wool 154,000,000 177,000,000 

" Foreign Wool 17,311,000 20,48(^000 

" Woollen and Worsted Yarn . 2,573,000 3,900,000 

Lbs. 173,884,000 201,380,000 

Lbs. Cotton Yarn 3,263,000 3,517,000 

" Cotton Warp 1,312,000 17,550,000 

" Cotton "... 17,571,000 24.744,000 

" Shoddy 19,372,000 46,583,000 

Lbs. 41,518,000 92,394,000 

The number of establishments and the number of cards has de- 
creased within the decade nearly one third. The material con- 
sumed, expressed in total of pounds, has increased, however, al- 
most in the same ratio in which the mentioned decrease of cards 
and establishments has taken place. In 1870 215,000,000 pounds 
of materials were consumed in 2,891 establishments, employing 
8,366 sets and 80,053 hands ; in 1880 294,000,000 pounds of ma- 
terials in 1,990 establishments, employing 5,961 cards and 86,504 
operatives. 

This would indicate greater economy in management, and greater 
efficiency of help, as in the former a capacity of 2,688 poimds, 
and in the latter year of 3,406 pounds per operative is the result 
of the year's work. Closely scrutinized, however, we observe very 
serious decline of the industry. The year was one of great pros- 



31 

perity, and still the largely protected industry could not give em- 
ployment to more than 6,000, or 7}-per-cent. above the number of 
hands engaged in 1870. Meanwhile the population had increased 
fully 30 per cent. Greater decline, however, is noticeable in the 
quality of goods produced. While in 1870 to 173,000,000 pounds 
of wool, 42,000,000 pounds of cotton, cotton warp, and shoddy 
were used — or wool 80 and cotton and shoddy 20 ; the proportions 
in 1880 stood: wool 201,000,000 pounds to cotton, shoddy, etc., 
93,000,000 pounds, — or wool 68 and cotton, shoddy, etc., 32, — 
clearly proving that woollen manufacture has been protected unto 
death, making no possible headway against foreign fabrics, a con- 
sequence of the heavy wool burdens bearing down our manu- 
facturers. 

Under the high specific duty of ten cents a pound on wool in 
the grease, on the low foreign wool prices all over the world at the 
command of foreign manufacturers — a wool duty higher than the 
whole labor cost amounts to in medium goods, — it would be 
surprising if our manufacturers could prevent the large importa- 
tions of foreign fabrics. But with all this burden we are making 
progress, and some of our heavy woollens and cloakings may fitly 
be compared to the best productions of foreign makers. What the 
industry would be with free materials can be imagined from a con- 
sideration of our progress under all these obstructions. 



CHAPTER V. 



SILKS. 



The silk industry of this country is now in a very depressed 
condition. After years of nursing under the aid of a tariff of 60 
per cent., lately reduced to 50 per cent,, with free raw materials, 
we still hear the same complaints of insufficient protection. Raw 
materials free, a 50-per-cent. tariff wall to keep out the neighbors' 
boys, and still not happy. Even the 50-per-cent. wall is not con- 
sidered high enough to protect, because the fellows from the other 
side have built ladders, called undervaluation, and thus are 
enabled to throw stones at us and make faces. So goes the story. 

Now let us examine this matter fully, and see if 'there is not a 
great deal more smoke than fire behind all this outcry. 

Undervaluation is at the bottom of the large importations of 
silk goods, according to the ruling doctrine advanced in explaining 
the phenomenon of an importation of $38,000,000 in 1884 (a year 
of commercial depression) against only $31,000,000 in 1880, the 
boom year, and $23,000,000 as the average from 1875 to 1879 in- 
clusive. The reduction of the duty from 60 to 50 per cent. 
ad valorem is another reason advanced. The pauper labor of 
Europe is called in also, to do its usual service in the consular 
offices as well, as with the clairvoyants who have the case in 
charge in the home offices. And so long as this explanation is 
always at hand, what use is there in worrying about new remedies, 
or about possibly other explanations of the sources of the evil ? 
That not all is going right, we all agree. 

But this answer does not suffice, and I aim to show now that 
the diagnosis of the doctors of the old school is not correct, and I 
will try and lay bare the plain facts as they appear to me after a 
careful study of the case. To meet all objectors on the outset, I 
will say that I fully understand the gravity of the situation, and 
that it is now a settled fact that foreign nations have formed them- 

32 



32> 

selves into a mutual organization for attack on our tariff wall, and 
that, in order to hold our markets, they keep selling us all their 
goods which we are able to use at cost, or less than cost, if need 
be. I will not for a moment dispute this protectionist credo— of 
the sinister designs of foreign powers on this republic and its in- 
dustries. I will admit that they dump all their goods on our 
shores at a considerable loss. 

In silks, however, they must go a good deal deeper yet, and the 
losses which they have to sustain to maintain their ground against 
our silk manufacturers must prove ruinous to them in the end, if 
the case is at all to be met on these grounds. The true situation 
is, however, materially different from all these phlegmatic views of 
indolent self-complacency, fostered by protection. This is the 
case, and I let the reader judge of the absurdity of all the above 
referred to assumptions. 

Our own silk industry stands on about this proportion of prices 
of component parts, according to the Census Report of 1880 : 
Silk and other spinning material, ^16,700,000 ; wages, ^9,146,000 ; 
profit and expenses, $6,170,000 ; or, expressed in percentage, 
52X29X 19. 

Now it is clear that our working methods in the silk industry 
are different from those employed in Europe. We have it 
corroborated by good protectionist authority, that of our consuls, 
that to this very day the home industry is still the ruling mode of 
production. Power-mills are being introduced gradually, but as 
yet they have not very materially affected the general state, and 
cannot be taken into consideration in comparing present and past 
productive methods as reflecting on the industrial situation. 

In America, on the contrary, the power mill is all but universal, 
and if there are any drawbacks connected with the application of 
the American methods to silks they are to be looked for in other 
directions than in that of the greater labor price of the product. 
Let us take the district of Crefeld as an illustration, where, 
according to Consul Potter, 90 per cent, of the work is done by 
hand-loom weavers. In 1S81 there were 32,000 weavers em- 
ployed to work up : Raw silk, 431,552 kos. or 966,675 lbs. ; 
schappe or spun silk, etc., 215,555 ^^s. or 482,843 lbs.; cotton 
yarn, 940,014 kos. or 2,105,630 lbs. 



34 

According to Crefeld price-lists of that time the average cost 
of these would be : 



966,675 lbs. organzine, at $6.75 . 
482,843 lbs. silk schappe, at $3.65 
2,105,630 lbs. cotton yarn, at 50 cents 



^6,525.056 
1,762,377 
1,052,815 



$9,340,248 

This is the cost of the material. 

In the manufacture of these $9,340,248 worth of raw textile 
material, 25,000,000 marks, or $6,250,000, is paid for labor, inclus- 
ive of dyeing, spooling, shearing, weaving, and finishing. 

The 32,000 weavers earned 16,000,000 marks, or $4,000,000, an- 
nually (a prosperous year), or $125 against $250, the annual average 
of earnings in an American mill. The difference, however, startling 
as it is on the outset against American labor, has quite another face 
when we show the relative proportions of material and labor in 
both countries : 





Material. 


Labor. 


Material 

in 100. 


Labor in 
100. 


America .... 
Crefeld .... 


$16,700,000 
9,340,248 


$9, 146,000 
6,250,000 


64i- 
60 


35i 
40 



We have here again the same exhibit which has been proven in 
almost every case touched by these papers : American earnings 
more than twice as high as in Europe, and labor cost considerably 
below the German or other European cost. 

Nor is this the whole case. We are using the silk raw, unspun. 
Crefeld buys all silk in the organzine and tram ready for the loom. 
The cost of importation of our silk in the year of comparison 
was $4.70 a pound. If we compute the relative cost of material 
and labor upon our American basis and condition, namely, to 
spin the silk ourselves and get into shape for our looms, we shall 
have to add about $2,000,000 to the Crefeld labor cost, and take 
it from the cost of material. We should then have for Crefeld: 

Material, $7,300,000 ; labor, $8,300,000, or material 47 and 
labor 53 per cent. 

Now, I admit that in a branch like silk, which contains so many 
kinds of goods, and where Crefeld manufactures so much in half- 



35 



silk stuffs, or goods with cotton backs, there is no adequate field 
of comparison. But there can be no doubt that the labor cost of 
goods manufactured there is as high as stated, and that we have 
to pay for it as well as for the materials used when we import 
them. They may sell them to us at cost, for dark and hidden 
reasons of their own, but the mere outlays for material and labor 
have to be refunded to the foreign manufacturer. Now, see how 
this account comes out. I will show it by means of a diagram : 
I. Crefeld cost landed here and duty paid. 

lE 




A B 

2. Cost of American silk. 



IE 



A 



B 



D 



In figure i, A is cost of material, expressed by 47; ^ is cost of 
labor, expressed by 53 ; and C is the duty of fifty per cent, paid on 
landing in New York. 

In figure 2, A is cost of a like amount of material (being free in 
both countries), and B is the American labor cost as expressed 
above, 64IX35 J, and D is theblank space where to fill in all possible 
" if s " that can be raised against this mode of investigation. 
Undervaluation would only affect C in i, as A and B have to be 
remitted in full to the other side, and even if goods would pass 
the custom-house at one half the price of manufacture (the usual 
claim of the " experts " is one of a 25 per cent, undervaluation 
only), the line would be reached midway in C, which would still 
leave enough of a margin for the American manufacturer equal to 
the whole cost of his material and wages account. The effect of 
a 50-per-cent. undervaluation I express by E, equivalent to a full 
protection of 25 per cent. I will not enter here into a discussion 
of the relative advantages of the two labor systems in the silk in- 
dustries. Very material differences do exist, but the effect upon 



36 

the cost of production is certainly in favor of the American 
method so far as the mere money outlay for wages is con- 
cerned in the process of turning a given amount of raw material 
of like nature into cloth. Nor is it very material for the purpose 
of this inquiry to answer the objection which could be raised 
against the method of arriving at a fair comparison, that of not 
having the same products under review. It is not and cannot be 
a matter of controversy, however, that Crefeld's goods, which we 
find so difficult a match to meet under a 50-per-cent. protection, 
and as for that, Lyons and Zurich goods as well, are composed on 
the whole of fully 53 cents' worth of labor for every 47 cents' 
worth of textile matter we import in manufactured silks, and that, 
having the raw material, silk, at the same cost as the foreigner, we 
ought to be able to compete under a much lower rate of duty 
than our present one. 

But to those who are not satisfied with this wholesale mode of 
comparison, I will give a more specific example of the labor price 
ruling in both countries, as paid by the piece. 

I have before me the rate of payment to Crefeld hand-loom 
weavers, paid for weaving one metre of taffetas 25 inches wide (of 
4 threads to the centimetre and 32 fine). This price list is from a 
committee of nine Crefeld masters, and is undoubtedly as reliable 
as any list can be : 

In 1867 2.50 marks or 60 cents ; in the very prosperous year 
1872, 2.75 marks or 66 cents ; in 1877 a reduction of 30 per cent, 
below the rate of 1867, down to 1.75 marks or 42 cents, had taken 
place. From 1879 to 1881 wages rose again to nearly the old 
rates, but now, under the depression which is beginning to be very 
seriously felt, and is assuming more and more calamitous aspects, 
the rate of pay may be even below that paid in 1877, when 42 
cents the metre of this 25-inch taffetas, equal to about 39 cents 
the yard, was paid. For the same count is paid in American mills 
at this period not more than 20 to 25 cents a yard. This is one of 
the finest grades, while in lower grades the prices for weaving on 
power-looms run down to 4 cents a yard. 

Though spooling and shearing are paid separately in Crefeld, as 
well as here, yet there are a number of auxiliary operations wnich 
are performed in the house-industry by the weaver, while in 



37 

American mills they are an extra charge. In the house-industries 
they are performed by the weaver's children in his narrow house, 
or by children hired for the purpose at a slight weekly outlay. 

Making all these allowances, and adding them on to the labor 
cost of American silk weaving, we do not yet come up to the price 
paid to a silk weaver in Crefeld at times of depression even.' 

The mere labor cost in the finished product of a pound of silk, 
spun, dyed, woven, and finished into pieces of goods of the 
same purity, will cost less in the United States than in Crefeld. 
The work account of a Crefeld " manufacturer " stops when the 
piece is delivered to him by the finisher, ready for shipment. 
That of the American manufacturer, however, is increased by the 
extra expense account. The Crefeld "manufacturer" has no fixed 
charges, such as mill buildings, machinery, fuel, foremen, and super- 
intendents, except the necessary help for the delivery of silks and 
examination of the returned goods in the various stages. All 
these charges the American has to add to his labor account. But 
the wear and tear of machiner}^, the interest charge, superintend- 
ing, and so forth, can be expressed by ten per cent, of the whole 
cost, and if added to the labor price, would only extend the line 
parallel to that of Crefeld labor in our diagram. 

Under conditions of depression referred to, a Crefeld weaver 
would consider 8 to lo marks for his weekly earnings a very satis- 
factory result, while under stated prices and full employment Ameri- 
can weavers make weekly wages from $8 to $io. It is clear from 
this that the pauper-labor theory is not suihcient to explain the 
price differences which undeniably exist. Of like standing would 
be the undervaluation theory as a means of explaining these 
discrepancies. That they do exist is a matter of record in our 
custom-houses. We collect annually round $20,000,000 on round 
$40,000,000 of imported silk goods, an unfailing proof that our 
manufacturers cannot compete in a great variety of fabrics. 

What seems more pertinent causes have to be looked for in 
another direction, and of these I shall speak more at length in 
the following pages. 

' See Appendix. 



CHAPTER VI. 

THE LOADING AND DYEING OF SILKS. 

From Great Britain we hear a like wail of distress in the silk 
industry. The pauper-labor cry is used as much there as here. 
Macclesfield and Spitalsfield, as well as Coventry, have never been 
renowned for paying very high wages to their poor silk weavers, 
not for the last twenty-five years at least. Besides, more of the 
silk work is done on power-looms than in Germany, or France 
either. The rate of wages is a lower one than in most other Eng- 
lish industries — cottons and woollens. With these advantages, 
though not protected by any tariff, the British silk industry ought 
to hold its own at least. But instead of this, the industry is rap- 
idly declining — I might say, fast dying out. The net imports of 
raw silk (deducting exports from imports) were on an average : 

Lbs. 

For 1861-65, annually 5,500,000 

" 1871-75, " 3,700,000 

" 1879-83, " 2,500,000 

The decline in the number of operators employed in the in- 
dustry is greater yet. Improved productive methods have made 
it possible to do with considerably less help for the same amount 
of product than in the high tide of prosperity. 

The imports of foreign silk manufactures have increased in the 
ratio in which the imports of raw silk have declined. They were : 

For 1865 /7, 260,000 

" 1S71-75 ........ averaged, 10,400,000 

" 1879-83 " 12,000,000 

The British Government, alive to the interests of commerce 
and manufacture, has instituted an inquiry through the Royal 
Commissioners on Technical Instruction. The third volume of 
their report has been published recently, containing a very valu- 
able paper by Mr. Thomas Wardle, of Leek, on the condition of 
the British silk industry. As the prominent features of our own 

38 



39 

situation are reflected by the picture drawn in Mr. Wardle's paper, 
I will introduce his statement, so far as it bears on the subject. 

Mr. Wardle lays the difference, where it properly ought to be 
put, upon the weighting of silks, as also the technical superiority of 
foreign dyers and finishers. Silk, as a fibre, is largely hygroscopic 
— that is to say, it absorbs moisture, atmospheric moisture, to a 
very large degree. Up to thirty per cent, of its weight can be 
absorbed without showing the moisture. As early as 1759 a silk- 
drying establishment was organized in Turin, so as to give a 
guaranty that the silk buyer does not spend his money for water 
instead of silk. Crefeld and Elberfeld organized in 1844 a joint- 
stock company, which was placed under public control, and whose 
officers are under oath to determine and declare the real condition 
and weight of each bale of silk, determined after fully drying 
sample skeins taken from the bale, and adding an allowance of 
eleven per cent, as the admissible degree of moisture of honest 
commercial silk. Similar establishments are to be found now in 
every large silk centre, guaranteeing the net weight of silk. Now, 
considering this to be the nature of silk in its pure, unadulterated, 
natural condition, let us see how man improves the gift of nature, 
to make a little go a great ways, and here I let Mr. Wardle have 
the floor : 

" I do not wish to be misunderstood as an apologist, still less an 
advocate, for this lamentable weighting of silk, but it will be my 
duty to describe things as they have been, as they are, and as they 
are sure to continue, until commercial procedure is reformed. 

*' There has been a great deal of nonsense talked about this 
question, and it is quite time that it was put upon its true basis, 
and facts and uses explained and left to speak for themselves. 

"For the English dyers I must say this : They are not fraudu- 
lent ; they, from the necessity of their vocation, declare their 
dyes and their weighting upon each invoice, and they, in order to 
obtain a livelihood, are bound to do the bidding of the manufac- 
turers. Whatever fraud there is, lies in selling the combined 
product as silk. 

" With regard to the weighting of silk in England in past and 
present times, I may say that I, as a dyer, never knew the time 
when silks were not weighted in some degree. This is but the 



40 

experience of every English dyer at least a century past. The 
difference between English and Continental weighting is in 
degree only, English silks having always been weighted to a much 
less extent than foreign ones. 

" It is often said that English goods wear well, because they are 
always of pure dye, and that French goods wear badly, because 
they are of weighted dye. This is not wholly the truth, and 
explanation is needed. 

" As is well known, silk contains a gum or varnish to the extent 
of about one fourth of its weight. This has to be discharged 
with boiling-soap solution for silk threads intended for the warp 
of a black-dyed fabric. Each pound is thus reduced in weight to 
twelve ounces. To this residue of twelve ounces it has been 
usual, from time immemorial, with occasional exceptions, to add 
from one ounce to four ounces of weighting matter, to raise it up 
again as near to its original weight as has been found desirable by 
the manufacturer in shaping the price and quality of his goods. 
The woof, or shute, being for the most part hidden or covered by 
the warp threads, did not of necessity require to be lustrous, and 
so another method of dyeing was and is resorted to. The silk is 
dyed upon the gum in the unboiled-off state — /. e.^ the gum is not 
discharged ; silk so dyed absorbs weighting matter easily, and the 
usual proportion was from four ounces to eight ounces of addi- 
tion, thus making each pound of silk return from the dyer weigh- 
ing twenty ounces to twenty-four ounces, but in some cases, as for 
narrow goods, very much heavier. Such dyes are technically 
known as souples — /. ^., the weighting matter added being for the 
most part in combination with the external gum or ' silk gelatine,' 
and not with the filbroine or silk proper. 

" Now, it is a fact beyond dispute that black-dyed silk, without 
weighting matter, is not so permanent in color as when weighting 
matter is used, and the reason is easily explained. A good black 
on silk, in fact the best black, is formed, as in ink, by the union of 
iron salt and tannic acid. Tannic acid has the property of uniting 
itself with the. filbroine or silk fibre and forming part of its sub- 
stance, and by so joining itself adds its weight to that of the silk. 
Black dyes without tannin are all more or less unstable. A good 
fast black, unweighted and proof against light, acids, and alkalies, 



41 

has yet to be discovered. Therefore a pure and unweighted 
black cannot be recommended for any fabric where permanence 
of color or durability of dye is wanted. 

" The process of weighting has been so handled and developed 
that dyers in both France and Germany have no difficulty now, by 
the use of tin, etc., in making their maximum weights up to 40 
ounces per pound on boiled-off silk, to 120 ounces per pound in 
souples, and even to 150 ounces per pound on spun silk. 

"I have a piece of so-called black silk ribbon of French dye, the 
warp of which is weighted to 24 ounces per pound, that is, the 
net 12 ounces of silk made into 24 ounces, and the shute weighted 
to the frightful extent of 100 ounces per pound, that is, one pound 
of silk made into 100 ounces. This is scandalous, and no French 
silks should be allowed to be imported without the loading being 
declared or the adulteration heavily taxed. It is high time this 
was done, and its effect would be to give the English manufactur- 
ers a chance. 

" The skill of the French in weighting their silks has been one 
of the chief causes of the decline of the English silk industry. 
They are at present producing weighted blacks vastly superior in 
appearance to the old-fashioned English dyes, and yet considera- 
bly more than quadrupled in weight to the degree of loading. 

" I think this suggestion cannot too stringently be acted upon. 
It is necessary the public should know what it is they are buying, 
and this has become impossible as matters now stand in silk 
goods, because the art of deception has become a corollary with 
the scientific skill and development of weighting. 

" If the weighting matter were as apparent in the goods as cot- 
ton or wool when mixed with silk, the articles would declare them- 
selves, and the reasons for the proportionate cheapness would be 
at once apparent ; but the effort has been so successfully made to 
incorporate with the silk such excessive proportions of loading, 
that the weighting matter is no longer distinguishable from the 
silk itself, inasmuch as, as I have already said, it appears to exist 
not merely in contrast with, but in actual combination with the 
silk fibre, and to partake of all the qualities which silk possesses, 
except that of strength, for I should observe that the strength of 
the silk fibre decreases in proportion to the augmentation of 



42 

weighting matter. Even the removal of the natural gum, or, as 
the French more properly term it, grh^ of silk by boiling off de- 
creases its strength, and to add to the boiled-off fibre any adven- 
titious matter further augments this loss of strength. 

'* The wife of a friend of mine lately bought a dress in London 
— a black silk faille, of French manufacture — for which she was 
charged 20s. per yard. In a month the fabric was completely 
disorganized or cut between sleeve and bodice, although it had 
only been worn a few times. This was simple robbery, for silk 
absolutely unweighted would not have cost half as much. I ex- 
amined the warp and weft of this fabric, and found the former to 
be weighted to 20 ounces per pound, and the latter to 32 ounces 
per pound." 

I have made so full an extract from Mr. Wardle's statement, as 
it gives so impressive an explanation of the causes which operate 
against the successful competition of English as well as American 
manufacturers with French silks. To the bad-wearing qualities 
of many foreign black silks, the female member of every house- 
hold who owns a black-silk dress can testify. The heaviest, 
apparently best qualities frequently break the soonest. Ameri- 
can silks are known to wear better. Nor is this the charac- 
ter of broad goods alone. When black-silk fringes were used 
in ornamentation, American fringes were fully twice as high in 
price as German fringes of the same style and pattern. But 
for every thing that required solidity, and where the price war- 
ranted their application, American fringes were given the pref- 
erence. Indeed, they were the only ones that could be used. So 
well was this known to buyers of ladies' cloaks that their first ob- 
ject of examination was the fringe. The foreign fringe snapped 
off, or rather fell off like singed paper in response to any not over- 
rough trial of its strength, while the threads of an American 
fringe could no more be broken than if they had been linen twist 
of the same thickness. 

Colored silks are not much weighted, but yet the weighting can 
be practised to nearly 100 per cent, of the boiled-off silk. The 
greatest difficulty is in black silks. Plain colored silks are hardly 
any more imported, American silks having driven them from the 
market. With such an immense stretch as is offered in the ab- 



43 



sorbing quality of silk, it is easy to see how much more the pound 
of pure silk can be made to yield in yards or ounces of stuff goods 
than the shining, hypocritical surface tells the buyer. The diffi- 
culty and even impossibility of detection to any thing near the full 
extent of the adulteration is admitted. The manipulation, dyeing, 
loading, and finishing is practised as a perfect science abroad, to 
which not our most skilled adepts have been able to aspire. It 
will be readily understood from what has been said heretofore, 
that it is not a difficult matter to load silks twice as high and pre- 
serve the appearance, as our foreign competitors, with more skilful 
handling, are practically able to do. Under such treatment of 
silks our diagram of the relative cost of silk in Crefeld and Amer- 
ica will make a different showing. 

(i) Crefeld silk landed here and duty paid, if silk is of condition 
and quality of American silk. 





^B. 





A B 

(2) Cost of American silk goods. 




(3) Crefeld silk duty paid, if silk is reduced to one half the 
American purity, and under the same proportions of material and 
labor as in No. i. 




ABC 

[A, cost of material ; B, labor ; C, duty.] 

In 3, the relationship of material (A) and labor cost {B) is the 
same, 47 and 53, as in the diagram given on a previous page on 
silks ; but the value of the material does not come to more than 
one half of our own. The cheaper silk matter is made to show up 
so skilfully that these silks, not one half as valuable, are frequently 



44 

preferred to our own on account of their finish, greater softness, 
and better color. 

And, as to this, the words of Mr. Wardle are as appropriate in 
our case as in that of Great Britain : 

" In looking to the future we must admit that the manufacturer 
will have to learn his trade, from the rudiments to the highest in- 
tricacies of his loom, and must be, like the French manufacturer, 
skilled in the manipulation of his material, and not a mere capi- 
talist, but a teacher of his work-people ; the dyer must be a man 
of liberal education, well grounded in the history and practice of 
his art, a well-trained chemist, and able to personally conduct all 
and any of the complicated processes for which he is responsible, 
and which he must thoroughly understand. The finisher, too, must 
throw his antiquated notions aside with his antiquated machin- 
ery, and by knowledge of mechanics and chemistry help to turn 
out the dyed and woven goods in that perfection of style and 
pleasing finish which distinguishes all Continental silks." 

This may not so fully apply to us so far as machinery is con- 
cerned, but who would say that the other strictures do not suit 
our case ? The progress we have made from recent beginnings is 
indeed wonderful. No one who has examined American silk 
goods, those especially of the better medium grades, can fail to 
recognize their value. 

No one who has examined the workings and organization of an 
American silk mill can fail to perceive what the results would be, 
if in other price-making factors than those controlled by the applica- 
tion of machinery to the art, we were equals of our foreign com- 
petitors. One cannot fail to discover, faultless as the work of the 
weaver may appear, that a great deal has to be brought yet into 
the art to give our silks, in most instances, the softness, the mel- 
lowness, which make French fabrics, perhaps of inferior value, so 
tempting to the touch and the eye of the buyer. To make an in- 
ferior fabric look and feel equal to one of higher cost is indeed an 
art in which only great skill and experience will succeed. Not 
that we do not attempt to make cheap goods, in silks as well as in 
other textiles, but they show more the imprint of incapacity than 
where a full supply of good and honest material meets the work- 
man half-way in his attempt to produce a sightly fabric. 



45 

Success cannot be reached except through workmen skilled and 
practised, and through masters understanding all the details of 
their lines. To this we must aspire through close study of all the 
subdivisions of the work, and not be content with the aid of 
superintendents, imported to do what ought to be the work of the 
owner of the establishment. The great textile industries of 
Europe are all the time introducing not only new chemical pro- 
cesses, but also new spinning materials into their fabrics. The 
Ramie fibre plays a not unimportant factor in silk manufacture. 
And, indeed, whoever has seen the fine silky threads in their 
combed condition cannot deny that it is a subject worth studying. 

The Dry Goods Bulletin^ of this city, time and again for several 
years now, has called the attention of manufacturers to the import- 
ance into which this fibre has of late grown in Europe. 

Only recently I had an opportunity to examine a sample collec- 
tion of fabrics made of Ramie fibre, sent on exhibition from Europe. 
Materials of pure Ramie had the brilliancy of silk, and half-and- 
half fabrics were difficult to detect from all silks. 

A chemical analysis of a piece of black silk of foreign origin 
made by Mr. John Dean, of Brooklyn, an expert of silks, revealed 
the following items as component parts of " original silk." I give 
his own description of his investigation as published in the Dry 
Goods Bulletin^ after having satisfied myself of the accuracy of 
his tests. 

" Chemistry and the microscope show up what so-called silks 
are composed of. With them no lacquard sham can pass for the 
genuine article. 

" Having obtained samples of black silks from various places of 
business in your city and this, and having put them to these uner- 
ring tests, with this communication you will receive the results. 

"Exhibit marked No. i is a sample of black gros-grain, $1.50 
per yard, said to be all pure silk, heavy and rich-looking, and has 
every appearance that it would stand any amount of hard wear and 
so give the wearer satisfaction. Chemistry shows it to be adulter- 
ated 700 (seven hundred) per cent., containing only sufficient silk 
to make the two surfaces ; while the microscope reveals the fact 
that the woof is not silk at all, but ramie. 

" No. 2 is the ramie fabric with silk extracted in one part. 



46 

" No. 3. is the same again after having its various adulterations 
extracted. You will kindly notice that the little silk in the warp is 
a different color to the woof ramie. 

'' No. 4 is still the same reduced to a carbon. 

" As near as I can judge, this imported fabric is composed of : 

Silk fibre 12.50 

Ramie ............ 6o.oa 

Oxide of iron ........... lo.oo 

Logwood, oil, and other matter . . . . . . . 17.50 

Total 100.00 

" Exhibits marked 5, 6, 7, and 8 have the adulteration extract 
extracted, which shows how little silk is used to make a heavy 
fabric. 

" No. 9 is strictly pure in warp, but woof or weft is heavily 
loaded. 

" Exhibit No. 10 is a sample of which America can justly feel 
proud ; it is not only home-made, but strictly pure in warp and 
weft ; the dye used, just sufficient (12 per cent.) to make it black, 
was the very best. 

" Exhibit marked 10 A had the same chemical used upon it 
as exhibit marked 2 ; you '11 notice the silk only is destroyed in 
this case (jo A). * Had much more been used,' to use an Irish ex- 
pression, * there would have been nothing left but the hole to send 
you.' 

*' Exhibits marked 10 B and 10 C are still the same fabrics, 
simple tests only having been applied. 

" Exhibit II is the carbon of No. 10 (please notice contrast be- 
tween this and exhibit 4). 

" Exhibit 12, sample of satin with its silk face removed. 

'' Now, sir, how long could such a fabric as No. 2 wear ? No 
wonder that good-souled old lady, Mrs. Public, sometimes gets in 
a tantrum, and gives way to anger, and says silk don't wear, and 
wonders iJbhy. 

" The fact is, Mr. Editor, she is too fond of a bargain when silk 
is concerned. She demands and insists upon having a dollar for 
fifty cents. I know not what manufacturers of other textile fabrics 
can do, but if it is tried on silk manufacturers the old lady will^^/ 
left every time." 



47 

Mr. Dean lays bare the root of the whole evil in this latter re- 
mark ; to the discussion of which point we shall devote the 
following chapter. 

But applying the philosophy of this investigation to our case, 
it will appear that it would naturally lead to better results if our 
manufacturers went to work to obtain all the technical instruction 
necessary to their art, such as the nature and treatment of fibres, 
colors, and finishing processes, than to trust to outside aid. 

The attention which the governments of Germany, France, and 
England are giving to these matters, the technical schools which 
are being established, the scientific training which is offered to all 
who prepare for the competitive contest of nations, show that we 
must not trust to the aegis of our goddess too blindly if we wish to 
maintain our grounds. 



CHAPTER VII. 

ADULTERATION OF FABRICS LARGELY DUE TO HIGH TARIFF 
TAXATION — GREAT DEMAND IN THE UNITED STATES FOR 
CHEAP FABRICS — A CONSEQUENCE OF THE GREAT CON- 
SUMING POWER OF THE MASSES. 

It will hardly do to paint a gloriole of superior morality around 
the heads of our manufacturers, as we find done frequently in our 
public prints, when explaining the greater purity of American 
silks. The silk manufacturer is not made of different stuff than 
the woollen manufacturer. It has been shown in a previous 
chapter " on woollens," from the aggregate of our product, how we 
have advanced in a brief decade in the practice of adulteration of 
materials, the purity of which is of far greater importance to the 
millions for health and comfort than that of any other fabric. Yet 
adulteration is practised to an extent which, to my knowledge, no 
other country has yet shown, in its exported woollens at least. What 
is proven in the abstract by statistical comparison is fully known 
in the concrete by actual experience in life to buyers of dry goods. 
With the reduction in price of known standard woollen fabrics a 
diminution in the quality and fineness of the wool or the closeness 
of the heft has gone hand in hand to a large extent. Frequently 
in mixed fabrics we observe a gradual reduction of the wool per- 
centage and an increase of shoddy and cotton, until finally little is 
left to vouchsafe the application of the name of woollen to an article 
shornof all but its name. Some exceptions of brands, whose manu- 
facturers rigidly adhere to the standard quality which built up the 
great reputation of their staple, show by the great success amid 
the general decline that the public is not slow to detect any hide- 
and-seek game. I will admit that the high price of our wools, 
compared to European prices, and the keen competition for our 
limited markets, force our woollen manufacturers to such prac- 

48 



49 

tices ; but, if any thing, it proves that like conditions create like 
effects, whether here or abroad. What our wool duties force 
upon our wool manufacturers our silk duties largely force upon 
foreign silk manufacturers — adulteration to cheapen their fabrics 
in order to beat our high tariff. Our cotton goods show that 
where there is an abundance of cheap materials at hand our 
manufacturers prefer at least to produce pure fabrics, and excel 
herein their foreign competitors. It would, though, be futile to 
say that the art of filling cottons with clay and sizing is not prac- 
tised by our industries in the cheaper imitations of better grades 
of their American competitors. It is, however, clear to all judges 
that while we excel in pure, unadulterated American cotton goods 
all nations, in cheap fabrics, where sizing is intended to give body 
to the material, we are wofully behind. This art is nowhere so 
fully understood as in England, and nowhere so poorly practised 
as in the United States.' 

It is easier to manufacture pure, unadulterated fabrics than 
where mixing of uncongenial materials would at once show the 

' England has built up an immense export trade more through the art of the 
finisher and other means of giving cheap fabrics a sightly appearance than by 
any other method. There is no secret made of this fact. If the barbarians of 
Asia and South America are eager buyers of thin fabrics, made hetivy by the 
admixture of clay, barytum, and starch, beautified by the decking out of the 
pieces with chromos and gold-tinsel bands, John Bull is willing enough to let 
them have the goods just as they want them. He knows that the preacher 
would be out of place in the dry-goods trade. He spends none of his valuable 
time in trying to convince his customers that the pure unadulterated fabric, such 
as we make it, is really the cheaper one. He studies their tastes and desires, 
which are mostly based on customs, grown up with the country or on climatic 
influences, and meets their deriiands and tastes. He aspires to nothing higher. 
Starting from these premises it is, however, somewhat mystifying to observe the 
" I-am-holier-than-thou " mien of Mr. Wardle, when he declaims against the 
dishonest silk manufacturers of the Continent. What they do in silks, the 
English have been practising for a half a century in cottons. If the English 
are not skilful enough to adulterate silks to the extent the Continentals are 
practising it, and give the goods the same appearance, the Con tinentals have never 
been able to do the thing in cottons as gracefully as the English do the trick. 
The latter, however, have this in their favor, that they sell the stuff for what it 
is worth and no more, as can be learned from the average prices of exported 
bleached cottons. (But this is also due, not to a greater degree of morality 
inherent in our cousins beyond the sea, but to the fact that the buyer of cotton 



50 



attempted substitution, unless covered by the most skilful manipu- 
lation. A perfect dyeing and finishing of an inferior article often 
necessitates more skill and outlay than fabrics of superior quality 
require. This is a far more prominent reason, why we attempt less 
to adulterate, than principles of higher morality. 

I can say this the more freely, without fearing to touch any 
sensibility, as I do not at all share in the common outcry raised 
against so-called adulteration or cheapening of fabrics by the ad- 
mixture of other than the genuine material. 

It is wrong to make shoddy cloth and sell it for all wool, if such 
is possible, which I doubt. It is wrong to make starched cotton 
cloth and sell it for pure cotton, if such is possible, which I doubt. 
It is worse to make loaded and adulterated silk and sell it as pure 
silk, because the adulteration is more difficult to detect and deceit 

goods knows to discriminate between cotton and clay. He seems to be well 
posted. An easy matter in cottons but rather difficult in silks.) 

Following is a list taken from the Board of Trade Reports of 1884 giving 

EXPORTS OF BLEACHED COTTON, VALUE AND PRICES. 









Price per yard 


Countries. 


Yards. 


£. 


in American 
cents. 


United States .... 


53,000,000 


1,468,000 


1325 


France ..... 


50,589,000 


1,023,000 


9.80 


Germany ..... 


48,757,000 


823,000 


8.25 


Belgium and Holland . 


107,000,000 


1,580,000 


7-25 


All other European States incl. 








Turkey ..... 


503,000,000 


6,164,000 


6 


Egypt 


124,000,000 


1,236,000 


4.84 


Central and South Am. States and 








W. India 


642,000,000 


7,848,000 


4.88 


China and Japan .... 


440,000,000 


4,700,000 


5-17 


British India .... 


1,792,000,000 


17,650,000 


4.75 



A trade which has to depend on the masses of the people, as in cotton goods, 
has to adapt itself to the purchasing powers of those for whom it caters. 
The clear understanding of this plain principle seems to be at the bottom of 
England's success. There is no room for sentiment in the brani of the British 
trader. 

There is little doubt that the want of adaptation to the customs, habits, and 
necessities of foreign nations has been one of the main causes of backwardness 
of extending our trade in cotton goods beyond the 10 or 12 millions between 
which points it has been oscillating during the last five years. It had been the 
same figure in i860. The British exports of cotton goods within this time 
varied between the sums of 350 and 380 million dollars. 



51 

is easier practised. But even in this branch we begin to under- 
stand the case, and the public has the remedy of rejection at hand. 
The prices at which these adulterations and imitations are sold in 
the market show clearly that the scrutinizing price-regulator is 
actively at work in giving the true level to fraud and deceit. But 
aside from the bad feature of selling an inferior article at the high 
price of the genuine article, which, however, cannot be practised 
for a very long period, or of the equally bad feature of forcing 
inferior woollens or shoddy goods upon our customers at prices of 
genuine pure woollens (largely due to the government tax on genu- 
ine wool), this adulteration of fabrics is nothing more than a rec- 
ognition of the commercial situation created by the democratic 
organization of our civilization. All our industries are bent on 
gaining the largest possible markets among the millions. Few of 
our capitalists, manufacturers, or merchants would care to embark 
in any enterprise where they could not feel sure that they could 
gain the patronage, the custom of the great masses of the people, 
the millions of bread-winners with small incomes. They recog- 
nize the comparatively small value of the trade of the few wealthy 
who use the finer fabrics. They know the great purchasing power 
of the collective incomes of the poorer classes. No nation can 
show so great a proportion of its people engaged in useful occu- 
pations. No nation can show so great a proportion of its labors 
ing people earning sums of money which in Europe would be 
considered fair incomes of the middle classes. This, of course, 
creates great purchasing power, which is freely exercised. There 
is a spirit of " I-am-as-good-as-you " about, which happily cannot 
be crushed even by momentary depression. Even if silks are high, 
they are bought nevertheless. On a Sunday our working girls 
are as well dressed as anybody, and if a 50-per-cent. tariff makes 
silks too costly in the pure state, they have to be satisfied with the 
substitute. This cheapening of fabrics is simply the attempt to 
meet the capacity of the slender purses of our millions. The 
nearest remedy against adulteration would be an abolition of 
duties, which would bring the pure article within the reach of the 
less pecunious classes who share in the annual consumption of a 
hundred millions of silk goods — American value, adding duties 
paid the government. High duties upon the material are a pre- 



52 

mium upon adulteration at home. High duties upon fabrics are 
a premium upon adulteration abroad. We cannot escape from 
this result of our fiscal system. We cannot eat our pudding and 
have it too. Our people love to be well dressed. 

If our government removes from their reach the genuine thing, 
which their love of the beautiful would prefer to have, why, they 
have to take the nearest thing they can get, the imitation. 

The cheapening of fabrics, through any new process or means of 
reducing the price, at once increases the consumption in a most 
unexpected manner. Cotton embroideries, made in Switzerland 
and Saxony on so-called Swiss machines, have been imported 
formerly in limited quantities. The great profits made originally 
by the manufacturers, however, caused so many machines to be 
built, the competition became so keen, that where 38 centimes 
was the average for a hundred stitches in St. Gall for 1875, ^^^ 
same work is done now for 25 c, and in dull times as low as 
20 c. To meet the demand for cheap and showy trimmings, 
necessarily arising in a country of a social organization like ours, 
some American houses in response thereto have opened branches 
there, and have their embroideries made to suit their trade. They 
use cheaper materials, copy or have designed rich patterns used in 
high-cost goods, and by reducing the number of stitches employed 
in the more costly work obtain effects nearly similar to that, 
but at considerably less price, and are enabled thereby to outsell 
their competitors. They have built up an immense trade within 
the last years, selling cheap goods at moderate prices and moder- 
ate profits. The outcry of fraud had also been raised against 
these importers, — the easiest explanation given to new facts, not 
studied usually by those in possession of an old-established trade. 
But to-morrow is the deadly foe of to-day, as to-day is of yester- 
day. Though we all suffer decline and death in this truism, yet 
it is the cradle of all growth and progress. 

Competitive forces are so keen and active to-day that they de- . 
molish in the briefest time the most gigantic structures of wealth 
and trading power. To fight and obstruct them is like the fight 
of the elephant and the locomotive. 

In the case cited above the United States Treasury Department 
had come to the aid of the old-established importing houses on 



53 



whom the new system has had the most injurious effect. The tra- 
ditional policy of the United States Government for the last twenty- 
five years has been to increase prices by legislation and executive 
action. It cannot surprise, therefore, that superficial observers 
should only see fraud and undervaluation in any introduction of 
goods, at prices cheaper than the official mind can explain, into 
the trade centres of this country. My most careful inquiry into 
the practices of the importers of embroideries has not enabled me 
to detect more than this perfectly legitimate and natural design 
of competitive forces. 

Now, this cheapening of an article of luxury has been the cause 
that the importations of embroideries have more than doubled in 
value, and perhaps quadrupled in bulk, within the last six or eight 
years— all clearly in response to the great consumptive capacity 
of the poorer classes of our population. 

The great power of absorption of textile fabrics by the Ameri- 
can people, taken per capita, can best be shown by comparing 
Germany's home consumption of textile fabrics with those of 
America. I have to arrive at the result in a roundabout way. Ger- 
many has no census enumeration of manufacturing industries as we 
have it. In taking the value of raw material as the basis of calcula- 
toin, we can, however, get at the relative total values of production. 
I propose to take the English export value of the material and add 
ICG per cent, as the cost of manufacture. This is to cover the 
labor cost, general manufacturing expense, rent, taxes, interest, 
and manufacturer's profit. It is somewhat in excess of our own 
manufacturing cost of the aggregate of our textile, industries, 
which stand as follows : ^ 



Carpets . . . • • 
Cotton goods .... 
Mixed textiles .... 

Silk goods 

Wool hats, woollens, and worsteds 
Cordage and twine 

Totals 



Material. 



$19,000,000 

113,700,000 

37,200,000 

22,400,000 

127,500,000 

9,300,000 



$529,100,000 



Labor. 



$6,800,000 
45,600,000 
13,300,000 

9,100,000 
33,400,000 

1,500,000 



$109,700,000 



Product. 



$31,800,000 

211,000,000 

66,200,000 

41,000,000 

203,000,000 

12,500,000 



$565,500,000 



Or, addition to cost of material, 72 per cent. 



54 

The difference between this and the assumed percentage addi- 
tion of loo will cover part of distributing expense not contained 
in the above. Both countries being treated alike, the result will 
not be affected very materially. 



a. AMERICAN CONSUMPTION OF TEXTILES. 



I. — Manufacturing, 1880 : 

Cotton, 961,000,000 pounds, at 14 c 

Flax, hemp, sisal, jute, etc., 100,000,000 pounds, at 8 c. 
Silk, raw, 2,900,000 pounds, at $4.75 

Clothing wool, 260,000,000 C 210,000,000 pounds), at 25 c 
Carpet wools, 36,000,000 pounds, at 15 c. . 



5134,540,000 

8,000,000 

13.775,000 

52,500,000 

5,400,000 



Total $214,215,000 

I count no other mill supplies, dye-stuffs, etc., but simply textile 
raw materials in the above. These other items amount to a total 
of $42,000,000, and would bring our material cost (all of which is 
first count, as I have eliminated all duplications) equal to foreign 
cost of $256,000,000, or : 

Manufactured value of ....... $512,000,000 

From this we have to deduct exports : 

Cotton goods, cordage, etc., say ..... 



Leaving .... 
We have to add now foreign imports 
Cotton manufactures 
Flax, hemp, jute, etc. 
Silk manufactures . 
Woollen manufactures 



14,000,000 
$498,000,000 



$30,000,000 
25,500,000 
32,300,000 
34,000,000 



Total 



5121,800,000 



Or, all textiles, home- and foreign-made .... $619,800,000 

This represents first cost, and does not include distributive, 
fiscal, or other expense than that included in manufacturing cost. 
Per capita of population it represents $620 divided by 50, equals 
$12.40 ; or, for each group of three, according to the census, it 
equals $37.20. 

^ American vi^ools, as rendered to mills, shrinking more than German wools 
valued at 25 c, in our account will have to be reduced 20 per cent, to bring 
them at a par with German wools. The census figures for all wools consumed 
in our mills, both foreign and domestic, are taken as $84,000,000. The differ- 
ence of $32,000,000 may fairly be taken as expressing the difference in the cost 
between foreign and American manufacturers. 



55 

Now let us see how Germany is situated : 

b. — Germany's consumption of textiles. 

I. — Manufacturing, 1880 : 

Cotton, 300,000,000 lbs., at 14c $42,000,000 

Flax, hemp, jute, etc., 247,000,000 lbs., at 8c. . . 19,760,000 

Silk, 5,100,000 lbs., at $4.75 24,225,000 

Wool, 190,000,000 lbs., at 25c. . . . . . 47,500,000 



Spinning materials . . .... $133,485,000 

To this we have to add 20 per cent, for mill supplies, etc., as 

in a, or 26,000,000 

II. — Excess of imports of yarns over exports, according to the 
Statistical Year-Book of the German Empire, 1 88 1, 
140,000,000 marks, or 34,000,000 



$193,485,000 
As we import all our spinning materials raw, or almost wholly 
so, while Germany uses large quantities of foreign yarns, it will be 
seen that the addition of 100 per cent, to represent the cost of 
manufacture is excessive in this instance. Intending, however, 
to throw all the benefits of the doubt to the German side, as I 
wish to show our superiority as consumers of textiles, I will not 
go into closer scrutiny of this item. We have now, therefore, a 
German textile production of round $380,000,000, against $512,- 
000,000 of ours, on the basis of materials of an equality of cost, 
and not on the basis of taxed materials and fabrics, raising Ameri- 
can valuation. But while we have to draw on foreign supply to 
the extent of 25 per cent, of our total product to fill our home 
demand, Germany has a large part of her smaller product over 
for export. 

Production . $380,000,000 

III. — Excess of German exports over imports of textile fabrics 
— Statistical Year-Book, 1881 : 

Exports .... marks 675,000,000 

Imports . . . . . . 104,000,000 



571,000,000 



Clothing, millinery, etc., amounting in excess 
of imports to 95,000,000. As about one 
third of this sum expresses labor and 
profits, etc., engaged in converting the 
material, we have to deduct, say . , 35,000,000 



And have left, .... marks 536,000,000 

To deduct as excess of exports, or . . . . . . 127,000,000 



Which leaves for consumption at home ..... $253,000,000 



56 

The population at 45,000,000 is $253 divided by 45 equals 
$5.62 per capita, which per group of 3 gives $16,86 for Germany, 
against $37,20 for America.^ In other words, our higher standard 
of living, and consequent greater productiveness, enables our 
working people to consume by nearly two and a half times more 
of textiles than people of a lower standard of living and lower 
productiveness. A cardinal point in this discussion is that great 
productiveness finds its natural equation in the greater consuming 
power of the people. Great consuming power of the masses 
naturally leads to great productive power. Both supplement 
each other. 

If the consuming power of the American were not greater than 
that of the German people, then the home product and imports of 
textiles of 1880 would be sufficient to cover a nation of 110,000,000 
people instead of 50,000,000. 

50,000,000 X 1,240 

— ^ —- —^— = 110,320,000. 

562 

If the German people had the consuming capacity of the 

American people, then Germany could find a market at home for 

$558,000,000 of dry goods, instead of $253,000,000, her present 

consumption. 

253,000,000 X 1,240 

— = 558,220,000 

The wealthy and well-to-do classes of all countries stand on 
about an equality as regards the consumption of dry goods. The 

^ This is the first value. The distributive value, of course, is considerably 
higher. The annual outlay of the consumer for dry goods would be, according 
to our method adopted in chapter XII., as follows in America : 

As above in A $620,000,000 

Duty on imported dry goods and textile fibres . . . . 67,000,000 

Increased cost of domestic raw material on acct. of protection . 35,000,000 
Increased cost on this raw material and other increase on acct. 

of protection .......... 50,000,000 

And 15 $^ for wholesaler's gross profit ..... 115,000,000 

'• 20^ '* retailer's «« 178,000,000 

And we have a gross value of ...... .$1,065,000,000 

as the annual outlay of our consuming millions for dry goods. Boots and 
shoes, and the additional expense for converting into clothing either by manu- 
facturers, seamstress, or tailor, is not included in this. 



57 

great divergence in our two examples is mainly due to the greater 
purchasing power of our working people. If there were no other 
proof, these tables alone would be sufficient to prove that the 
well-being of the working classes is the only sure fundament of a 
nation's lasting and solid prosperity. To the enhancement of 
this all intellectual forces must apply themselves. Raise their 
standard, and all else will be raised by natural gravitation. The 
capitalist, the employer, the merchant, the professional man, all 
in turn find increased prosperity from this greater ability to 
consume, inherent in our working people. But this greater con- 
suming power cannot be maintained, far less increased, by taxing 
the dollar of the workingman,^ but, on the contrary, by the elimi- 
nation of all taxes, public, corporate, or private, so far as possible, 
therefrom. 



CHAPTER VIII. 

PRODUCTION OF TEXTILES IN GENERAL — THE IMPORTANCE OF 
THE CONVERTING INDUSTRIES LABOR-SAVING DEVICES. 



Next to the agricultural interest, that of textile industries 
is of the greatest importance commercially and economically. If 
for no other reason than as employer of labor, it would be well 
worthy of the most earnest attention of the statesman. In con- 
nection with foreign affairs, the importance of the textile industries 
is apparent at a glance when their large proportions are taken 
into view, as illustrated by their position in foreign trade and 
commerce. 



I88I. 


General exports. 


Exports of textiles. 


Percentage of 

textiles to general 

exports. 


Great Britain . 
United States . 
Germany . 
France 


$1,123,000,000 
884,000,000 
715,000,000 
658,000,000 


$590,000,000 

15,000,000 

197,000,000 

165,000,000 


52i 

27i 

25 



We are not very great exporters of textiles (our share in the 
combined export trade of $967,000,000 of the four principal 
commercial nations of the world not being more than $15,000,000.) 
but as if to compensate for this shortcoming, we make up for the 
difference as importers of textiles, where we hold the first rank : 



Great Britain (1881) 
United States (1881) 
United States (1884) 
Germany (188 1) . 
France (1881) 



General net 
imports. 



51,900,000,000 
642,000,000 
667,000,000 
712,000,000 
950,000,000 



Imports of textiles, 

including apparel, 

etc. 



$98,000,000 

113,000,000 

130,000,000 

90,000,000^ 

48,000,000 



Percentage of 

textiles to general 

exports. 



i7i 

I2i 

5 



^ Including $65,000,000 of yarns. 
58 



59 

Nearly one fifth of all our imports are textile manufactures, and 

when we deduct from the imports of textiles all yarns, as we do 

not import any, while they form a very large part of the textile 

imports of Germany and France, then our imports in textiles 

nearly equal the imports of these three nations combined : 

i88r. 

Great Britain $96,000,000 

Germany 35,000,000 

France 36,000,000 

$167,000,000 

The United States in 1884 imported, excluding yarns, $128,- 
000,000, which is equal to the combined imports of Great Britain 
and Germany, or nearly four times the imports of either Germany 
or France. 

THE IMPORTANCE OF THE CONVERTING INDUSTRIES. 

But there is a new and very important adjunct of the dry-goods 
business connected with this trade now, which from its magnitude 
deserves prominent mention : that of ready-made clothing for 
men and women. Speaking of the wholesale branch of this 
business alone, including shirts, millinery, etc, I doubt that there 
is any industrial branch in this country which gives employment 
to so great a number of people. Commercially this trade is not 
of less importance. It may safely be said that of all heavy woollens 
manufactured in this country, three fourths at least are converted 
by the wholesale clothing trade. It is an equally safe estimate to 
state that of all heavy woollens manufactured for ladies' cloaks, 
nine tenths are consumed in the manufacturing industry of cloaks. 
Of shirtings, flannels, and muslins it would be difficult to estimate 
proportions, but the immense quantities consumed in the ladies' 
underwear manufacture, in that of men's shirts and kindred 
manufacturing industries, can safely be measured by hundreds of 
millions of yards. It is, therefore, fit to speak in this connection 
of these industries, industries of recent growth only, the children 
of the sewing-machine, so to speak. 

The annual sales from first hand amount to fully $300,000,000, 
all of which is consumed at home. Though it may safely be 
asserted that this branch of the dry-goods trade is more developed 



6o 

in the United States than in any foreign country, yet our exports 
are nil, while the exports of foreign nations are largely composed 
of made-up clothing, etc., hats and caps, shirts, millinery goods, 
etc. 



Exports of general 
dry goods exclus- 
ive of yarns. 



Exports of made- 
up dry goods. ^ 



Per 

cent. 



Great Britain 
Germany . 
France 



$500,000,000 
165,000,000 
158,000,000 



$50,000,000 
21,000,000 
22,000,000 



10 
13 
14 



For manufacturing purposes the sewing-machine is employed 
perhaps as universally in Germany, France, and England as in 
America, yet it would not be a rash assertion to maintain that the 
factory organization in the United States, including the power 
employed, is far more complete in this branch than elsewhere. 
Though I am not able to make comparisons from personal obser- 
vations, yet there are many indications to prove that we use even 
in steam-power factories far less help for a given amount of work 
than the French do. For instance, one of the greatest French 
authorities, M. Leroy-Beaulieu, in his book, " Le Travail des 
Femmes au XlXme Siecle," has given some very interesting details 
on this very modern subject. The number of basters and finishers 
employed in a white-goods factory, preparing the materials for the 
machine operator, sounds astonishing to an American. He speaks 
of the co-operation of four persons for one machine as an ordin- 
ary method of work. The forewoman of the firm of Godillot & 
Cie., at Paris, a house employing about 1,000 people and using 
steam as a motive power, told M. Beaulieu of ten to twelve per- 
sons required for one machine to prepare and to finish the work. 
He adds, however, that this is not the ordinary proportion, and 
that every thing depends on the material and the skill of the opera- 
tor. So far as wages are concerned, they seem liberal compared 
with the usual rates paid for women's work in Europe. What he 
says in a general view is attributable to the United States to a 
greater degree yet : " When we enter into an inquiry on the influ- 

' Not counting hosiery or knit goods. 



6i 

ence of the sewing-machine on wages, we may present this as an 
almost certain fact ; it is indisputable that the machine-operators' 
pay is higher than the hand-sewers' wages were ever before." 
After one month's apprenticeship the firm of Godillot pay their 
operators 3 francs 50 centimes, or 66 cents, a day. The firm of 
Hayem gives 3 francs, or 57 cents, as the average, but 5 francs to 
6 francs, or from 95 cents to $1.14, for their best operators. 
Basters and finishers get 2 francs to 2 francs 50 centimes, or 38 to 
47 cents, or, as the highest attainable rate, 3 francs to 3 francs 
25 centimes, or 57 to 6^ cents for 11 hours' work in the factory. 
These wages seem high compared to the 2 francs, or 38 cents, 
which M. Beaulieu states as the average of female wages in Paris, 
■or even the higher rate of 2 francs 78 centimes, or 52 cents, the 
average for the same class of workers, according to a report of a 
parliamentary commission by M. Ducarre, Deputy of the Rhdne 
Department. 

Mr. Edwin Chadwick states the weekly wages of an English 
operator as ranging from $3.84 to |6 (16 to 25 shillings). 

Daul, "Die Frauenarbeit," gives $2.14 to $3.24 as the weekly 
earnings of German machine operators. 

In American white-goods factories finishers get about $5 a 
week, while machine-operators (entirely piecework) earn from $6 
to $8. The baster is a thing of the past. The finest work is made 
and completed exclusively by machine work, except a few finish- 
ing stitches by hand sewers. While in French factories an average 
of four hands to one machine is counted, the proportion in an 
American factory would hardly be expressed by a reversal of the 
figures, hardly one finisher or extra hand being required to four 
machines, and this only in the finest work, the cheaper kinds being 
done entirely by machine. 

CHEAPNESS OF AMERICAN WORK. 

The manufacturers of other countries would be astonished if 
they could look into our factories and examine how we manage to 
produce such heaps of work at such trifling expense by the piece. 
A look at our tool chest might explain the secret to them. The 
hemmers, the folders, the binders, the corders, the tuckers, the 
rufflers, the plaiting machines, the puffers, the guages, the edge- 



62 

folders, etc., etc., are all of American invention. With their aid 
and a proper division of labor, all the work is accomplished with 
such rapidity and cheapness that we have no difficulty in finding 
a market in Canada. Of course this applies only to plain work — 
that is to say, goods made entirely of American cotton goods. As 
there is, however, a great deal of embroidery and other fine im- 
ported material — such as laces, fine muslins, nainsooks, etc. — used 
in all such work, and as we have to give to the government and 
to the fetich of protection four yards of these for every ten yards 
used, of course this whole trade falls to the ground. 

The subdivision of labor in this branch of industry, it will be 
readily understood, is practised to the minutest details. The in- 
vention of new machinery and improved appliances is about as 
rapid as the American manufacturer is quick to discard his old 
machines and make room for the new better thing, if it materially 
cheapens the product. The Pacific Tucking Company own a 
machine arrangement by which they can do tucking at a far lower 
rate than manufacturers can do it in their own steam-power fac- 
tories. The consequence is that every manufacturer sends his 
material to the company's factory, to have his tucking done there 
at the very small price of twenty-five cents for a hundred yards, 
including cotton for sewing and manufacturer's profit. 

Of course the efficiency of an operator counts for a great deal. 
The highest earnings at the same rates by the piece are made by 
those who turn out the best and neatest work. Their work needs 
no mending or overhauling. They are the most profitable to the 
employer, and no manufacturer who understands his business 
would not rather have fifty operators who earn $io than loo op- 
erators who earn $5 a week. Nor would he grudge them their 
earnings, because they are the cheapest to him in the end, as is 
very apparent : 

1. From the saving of machinery and space. 

2. From the saving in expense of superintendence and examina- 
tion, and, 

3. From the better work, assuring a higher selling price for the 
product. 

The difficulty is not so much in the insufficient earnings to afford 
a decent living to our working classes, as in the short time and 



63 

lack of employment. The half-time, the weeks without work 
which follow a few months of extreme activity in each season, 
are equally dreaded by the employers and employed. Larger 
markets would be a great relief to both. They would add so many 
additional weeks in the year's earnings, without in the least neces- 
sitating any deduction of the operators' pay by the week or by the 
piece. 

The question may be raised whether our foreign competitors 
may not possess the same means and labor-saving tools. To this 
there is a twofold answer : First, it does not appear that when 
machinery is used, it is made to yield the same results ; and, sec- 
ondly, many of our most advantageous appliances and machines 
are entirely unknown to them, as evidenced by the imported fabrics 
of foreign manufacture. 

An American manufacturer of knit shirts and drawers has lately 
returned from a European trip. He found no difficulty in making 
a market for his goods in London. Of course this only applies 
to cotton goods, or goods with a very slight admixture of a cheap 
wool ; the higher wool grades would be excluded by virtue of the 
wool tax. He found by comparison that one of his operators on a 
cylindrical knitting machine turns out about as much work as 
four machines in Chemnitz, Saxony. " Of course," he said, " I 
can afford to pay my operators a dollar against the twenty to 
thirty cents a girl gets in Chemnitz." 

The improvements we are making in every kind of machinery 
would be a very interesting topic, but would lead me to occupy 
more space than I intend giving to this subject at present, but 
explains fully how our operators can make comparatively high 
earnings coupled with low labor cost. 

I will describe one machine of American invention to illustrate 
this fully. Ladies' cloaks of plush, velvet, damassee, etc., lined 
with quilted satin, have been very fashionable for the last few 
years. I have examined a great many imported garments of this 
kind, mostly of Berlin manufacture. I have examined the linings 
and found them all quilted with the sewing-machine of a single 
needle. We, on the contrary, use quiltmg machines, driven by 
steam-power, which are able to quilt the material, of from eighteen 
to thirty-six inches in width, right through. The machine has 



64 

seventy-two needles, which all operate at the same time, and can 
do the work in diamond, zigzag, wavy line, or escallop patterns. 
In a yard of thirty-six-inch quilting are about one hundred yards 
of stitching, counting the exact space over which the stitches run. 
So far as the direct labor cost of this work is concerned, it is not 
more than four fifths of a cent, as one operator can do a thousand 
yards a week at a salary of eight dollars. Imagine how long it 
would take a single-needle machine operator in Berlin to turn out 
a thousand yards of quilting, and how much it would cost even at 
the low wages of one mark or twenty-four cents a day ; our work, 
besides greater cheapness, having the merit of much greater regu- 
larity and beauty. 

The machine described here does the work on the running 
length of the cloth. It would not be appliable to the quilting of 
petticoats, which are cut in gores to form a conical-shaped skirt. 
Another American invention, not used in Europe either, supplies 
this want. It is a quilting machine, where as many as thirty 
needles, simultaneously sewing, are set so that the size of the upper 
stitch is smaller than the lower stitch, so that the quilting comes 
out in perfect proportion all the way up to the end of the pattern. 
In this way a rounding is formed in conformity with the shape of 
the skirt. Sewing cotton, wadding, etc., included, this work costs 
from $1 to $3 a dozen according to the depth of the work. In the 
highest-cost pattern are thirty lines of quilting, equal to sixty lines 
of straight sewing. As there are thirty yards of straight sewing in a 
dozen skirts, there are nearly eighteen hundred yards of sewing for 
less than $2, or ten yards of single sewing for less than one cent. 
Through the inventive spirit of our people difficulties are over- 
come which at first sight seem almost insurmountable. 

Another machine of American invention, of even greater im- 
portance in the matter of dress manufacture both for men and 
women, is the button-hole machine. Even this is not known in 
Europe, if we may judge from the many cheap garments imported 
from Berlin. If anywhere, it might find employment there in 
ladies' cloaks and jersey waists, exported in large quantities to 
America. But all button-holes which I have seen in imported gar- 
ments are hand-made, and as to that, mostly very poorly made. 
American-made button-holes are all machine-made and generally 



65 

very solid and closely worked. The price by the piece is very 
low. For a good-sized button-hole, including the sewing silk, we 
pay now forty cents a hundred. A very recent invention is a 
button-hole machine which automatically marks and cuts the but- 
ton-hole, and which can do the whole work, including the silk, for 
twenty cents a hundred button-holes. At this rate it would be a 
very difficult task for a Berlin hand button-hole maker to compete 
at one mark, or twenty-four cents, a day with an American but- 
tonhole maker at $1.25 to $1.50 a day. Of not less importance 
and ingenuity are machines which sew on buttons or stitch eye- 
lets, etc. 

But this might be followed ad infinitum^ were it my object to 
write a history of labor instead of pointing out the difference in 
the methods and the relative productiveness of labor in competing 
nations. It seems to me that I have sufficiently demonstrated the 
point, that ouv labor cost is relatively cheaper, our productiveness 
greater, than \hat of other countries, and that price differences 
against us ar*' not in the labor cost, but in that of the material. 



CHAPTER IX. 

IRON AND STEEL. 

No review of the industries of our country would be com- 
plete without an inquiry into our position in the world of iron and 
steel. Here more than anywhere else the productive methods and 
other intermediate opportunities are of far greater importance as 
price-makers than the accidental amount of wages paid here or 
there as compensation for a day of labor. And yet if we were to 
judge of the relative positions from official data, we should have 
little else to stand upon than the often repeated quotations of the 
weekly or yearly earnings, the kind of food consumed by the 
working classes, etc., etc. For any thing directly relating to the 
composition of prices of the product of labor, we should be not wiser 
than before examining the contents of the blue books. Fortunately, 
however, there is a great deal of outside information on this great 
question of the price regulator of iron, by far the most valuable of 
all metals, especially so in the cruder forms of iron and of steel. 

So far as the metal is concerned, in its last stage of finish and 
usefulness to man little need be said. It is sufficient that we have 
conquered the world's markets for our clocks, our sewing-ma- 
chines, our agricultural machines, and motors of all kinds, loco- 
motives, engines, hardware, tools, etc., etc. On the materials 
which we consume in the construction of these articles we have 
to pay duties, if they are imported, ranging from 45 to 75 per 
cent. The materials of American production even now under 
the great depression in the iron and steel industries, are 25 to 
33 per cent, higher than in England or Germany. We pay our 
help twice and three times the weekly and, when fully employed, 
yearly wages paid in Germany, and still we invade their own 
country of cheap labor. The further our manufactures are re- 
moved from the crude material and fabric, the more labor is 
put into the work, the easier is the contest and victory for us. 
How we do it is too well known to an American reader to require 

66 



67 

long explanation. We build machines to do the work which in 
cheap-labor countries is mostly done by hand or with primitive 
tools, or with tools and machines slowly progressing to a higher 
stage. We construct special machines for each part of a new ma- 
chine, or a tool, or a fire-arm, as soon as we find out that there may 
be demand enough to promise a return of, and a profit on, the 
outlay. It can never more be a question of how we can control 
the home market. This could not be wrenched from us any more 
than our home market in wheat by German or British wheat. 
The question is how to extend our foreign market, how to give 
increased employment to our machine-shops and foundries. No 
reduction of wages would be required, as we are now able to 
compete with the world under the great oppression of higher 
iron and steel prices. What we need is simply a reduction in 
the prices of crude iron to the basis of foreign iron prices, as 
nearly as can be expected from our position as producers of 
pig-iron, on which point I shall treat in another chapter. These 
higher prices of the crude and raw material are now matters of 
much graver importance than at the time when we had not suffi- 
ciently advanced in manufacturing industries to supply our own 
wants. Then it was simply a question with us whether we should 
find it good economy to tax Peter to pay Paul. But now, when 
our productive capacity has outgrown our own markets, when we 
produce in nine months what we can barely consume in a year, 
then we can safely say that any measure increasing the cost of ma- 
terials beyond their normal price is taxing Peter and robbing Paul. 
When we have arrived at such a stage of our history, then such 
a tax system ceases to be "protection," and begins to be a direct 
tax upon labor and capital — upon labor and the laborer's earnings, 
pure and simple. 

HOW OUR PRICES COMPARE WITH FOREIGN PRICES. 

That the tax on the cruder forms of iron is a burden upon our 
industries, will be contested by few. Even the very pets of pro- 
tection, the Bessemer-steel producers, will admit it, not volun- 
tarily to be sure, but when confronted by figures. It would be 
too inconsistent to admit now that they could do without protec- 
tive tariffs, when two years ago they grew frantic and saw destruc- 



6S 

tion and ruin in the work of Congress reducing the duty from $28 
to $17. But what is the condition to-day ? The British price of 
Bessemer-steel rails is ^4 15^'., or $22.75, ^^^^ on board. The 
American price on board cars at the mill has been as low as $26, 
a difference of from $3 to $4 a ton. 

Sure, it would cost this much alone in freight and commission 
to land a ton of English rails and lay them down on the wharf 
in New York, even under most depressed freight rates, if there 
were not a cent of duty to be paid. But in slavish subser- 
viency to the fetich of protection, the owner of the steel-works 
insists on the continuation of the present system of tariff taxation, 
and he willingly submits to the differences against himself as com- 
pared to the charges of the foreign producers, as will be seen from 
this balance-sheet : For the production of a ton of Bessemer steel 
it takes about ij- tons of iron, according to our Census report. 
This includes Spiegel-eisen, which has to be imported, and pays a 
duty of $6.72 a ton. But as not more than about ^^ of Spiegel- 
iron is used, we will call all the iron pig-iron. Now the present 
price of Scotch pig-iron is £2 2s., or $10.50, a ton, while the 
cheapest grade of American iron could not be brought to the Bes- 
semer converter for less than $16 a ton. At ij tons at $5.50, 
or i^ tons, according to Mr. J. Lowthian Bell in Iron and Steely 
there would be a charge of $6.60 against the American manufac- 
turer for iron and 50 cents for his fuel, if the works are well situ- 
ated, or in all $7.10, in favor of the foreign works. 

Were our raw iron as cheap as it is to the foreign steel-maker, 
we could certainly produce Bessemer steel at $20 a ton, and un- 
dersell Great Britain or Germany by three to four dollars, and 
be just as well off as under present conditions, when we have to 
bear an extra charge of $7.10 on our materials. 

Under this condition of affairs, as illustrated by the hard, irre- 
pressible facts of indisputable prices, it would be a waste of time 
and effort to discuss with our protectionists their stock argument 
of the higher rate of wages. True, the rate of wages is higher, 
the earnings are higher, but the product is cheaper than anywhere 
in the world, if the higher cost of the material is eliminated from 
the computation of prices. This is conclusively proven by the 
above, and needs no further comment. 



69 

Ably supported by our protectionists, who insist, as a ground- 
work of national prosperity, upon the necessity of an even taxing 
all around, and thus prevent us from sending our steel rails to 
South and North American countries, the English and Continental 
steel-makers have entered into an agreement not to sell their rails 
■ below a certain price. They were compelled to this by the ruin- 
ous competition which had forced the price down to ^4 ^s., a 
figure slightly above the one at which we are selling rails now in 
protected America (the material being calculated on the basis of 
the foreign material cost). 

The London Economist, in its trade review of 1884, says on this 
topic : " Under the influence of severe competition the price of 
steel rails was forced to about ^^4 per ton (^4 55. being the 
lowest reported quotation) in the month of January, and immedi- 
ately thereafter an arrangement was come to among the principal 
makers of this country and the Continent by which the price was 
advanced from ;^4 15^. to ;^5 5^., with an understanding that the 
orders received were to be apportioned among the different 
makers. So far this arrangement appears to have worked satis- 
factorily, although the volume of business has been small, and it is 
no secret that some large buyers are holding back in the hope that 
this combination may be broken through, and it is certain the 
advance in price must have tended to restrict business." We 
might as well have our share in this parcelling out of the trade of 
the world in steel rails, or, by a sort of Battle of Dorking, not 
dreamed of when the book of that name was written, force in open 
competition the trade of the Continent. 

Our preventive tariff, however, insists that we shall not send 
our steel abroad when half our steel-works are idle, and when, 
without any tariff, not a ton of rails could be landed here even if 
the price of foreign rails were £,4, or $3 to $5 less than the 
present European combination price. 

THE INROADS WHICH STEEL IS MAKING IN THE PUDDLE-IRON 

INDUSTRY. 

The changes which are constantly going on in the world of iron 
and steel are of a nature which would hardly permit using figures 
of prices and of methods of two or three years ago for arguments 



70 

or conclusions of to-day. An invention, an improvement, thought 
out in the quiet study of the scientist, is apt to throw out of work 
and earnings thousands of helpless and industrious workers, to 
confiscate or make worthless millions and tens of millions of 
capital, and bankrupt and wreck a life-time of anxious, intelligent 
leadership. Such a change has taken place and is taking place in 
the iron trade. The rapidity with which improvement follows im- 
provement in the process of manufacturing steel by the Bessemer, 
open hearth, and other processes, almost defies recording. The 
iron puddler is especially suffering from this inroad, and when we 
examine the rapid advance in the production of steel, coupled 
with a great decline in prices, we can well imagine that great dis- 
placement must run parallel with this extension, and that a decline 
in the iron industry cannot be attributed to foreign competition, 
but must be sought in the inroads of science and thought upon the 
domain of action and matter. Now, in this realm, no country can 
wrest the laurel from America. If once placed on an even foot- 
ing with her competitors, she will be the arbiter of the world's 
markets. 

TABLE SHOWING THE NUMBER OF TONS OF BESSEMER AND BASIC 
STEEL PRODUCED BY AMERICA, GREAT BRITAIN, AND GERMANY. 





Bessemer SteeL 


Basic Steel, 




America. Great Britain. 


Germany. 


1884 


1 
1,538,355 1,300,000 




1883 . 










1,654,627 1 1,553.380 


970,000 


1882 . 










1,696,450 


1,673,000 


993,000 


I88I . 










1,374,000 


1,780,000 


865,000 


1880 . 










983,000 






1878 . 










732,000 






1876 . 








1 526,000 






1874 . 








192,000 






1872 . 








120,000 


500,000 





New employments, for which puddled iron has been in use 
formerly, are found daily for steel. 

"Iron rails have been displaced by those of steel, and the 



71 

puddling furnaces thus laid idle have found employment in fur- 
nishing plates for shipbuilders. But, whereas, in 1877 the tonnage 
of vessels built of steel was 1,118, in t88i it had risen to 71,538. 
Has the puddler before long to see his occupation in connection 
with shipbuilding follow the example of the rail trade ? . . . 
And many other, we may say most other, trades .for which 
puddled iron is now used, in the course of time will be supplied 
from the Bessemer converter or from the open-hearth furnaces." 
(J. Lowthian Bell, in Iron and Steel.) 

In America the iron nail is beginning to be displaced by the 
steel nail, which can be made as cheaply as the iron nail. So will 
a great many other industries, fence-wire making, structural iron, 
etc., follow suit, and gradually the age of iron will be gliding into 
an age of steel. The greater durability of steel would alone 
suffice to make it preferable to iron, when once we have adapted 
our mills to its production and transformation. There is, how- 
ever, a decline of consumption to be expected from this greater 
durability of steel. This, again, will be balanced, after perhaps 
some transitory suffering, by the more extended use found for 
steel than heretofore for iron — steel sleepers for railroad building 
being one of the new uses, for instance. Many others will follow, 
and finally, I may venture to say, steel will perhaps become a very 
formidable opponent of our lumbermen, and prove a very benefi- 
cent factor in the preservation of our forests. 

A TAX UPON THE MATERIAL IS A TAX UPON WORK AND WAGES. 

The present low prices of iron and steel prove fully that our 
manufacturers and workmen need not fear foreign competition, 
not under severe pressure from equally depressed markets in 
Europe, had we free trade in all forms of Iron. Our greatest 
pressure upon profit and wages is sustained from home compe- 
tition in markets limited to the home demand. 

I will show the disproportion of tariff charges upon iron prices 
of to-day, when comparing them to foreign prices, and taking J3 
as a sum covering freight and charges under very lowest freight 
rates of dull markets. The prices are the lowest quotations of 
the year. 



72 





Lowest 

Amer. price 

of 1885. 


English 
price. 


Ft. 


Duty. 


English 

price in 

New York. 


Bessemer steel, ton 


$26 00 


$23 00 


$3 00 


$17 GO 


$43 00 


Bar iron, medium 












Staffordshire, /^6 












to £6 lo 




30 GO 


3 00 


2G GO^ 


53 00 


Am.erican, ij^ to if 












cents a pound . 


39 20 










Scotch pig-iron . 




10 50 


2 00 


6 72 


19 22 


American No. 2 . 


$17 to $18 










No. 3 . 


$16 to $17 










Gray Forge iron . 


$15 00 











Now I will also show the differences between American and 
British iron and steel prices, if the difference in the prices of the 
material entering into each ton of product is deducted from the 
cost : 









V-I><-1 


vm 


•w 1 


V- 1 1 I 




a 










be 


(u hflcu vj 




tc 




<n 


00 




15 COsJJ 




c ° 




O-M 







>- i^-a 




a 


S-c 
0^ 


a 
^.2 





ased c 

h over 

mater 


erorg 
t than 
tonaf 
ting 
es. 




to rt 


tn c3 


(U 1 


<U (U 


(U-tf ^ 


^ en f- ^ 




Cm 


C 


h bfi 


h 3 


i-, in 


c! Ocn == 




" 


0-^ 










In one ton of Besse- 














mer steel . 


H 


2 

3 


$6 60 


$0 50 


$7 10 


— $4 10 


In one ton of finished 














bar iron . 


li 


2 


6 18 


I 50 


7 68 


+ 1 52 


One ton of pig-iron 












+ 6 00 



The nearer we come to the cruder forms, pig-iron, the nearer is 
the price to the foreign price inclusive of duty and freight. The 
difference here is barely $2 between the duty-paid price of foreign 
pig-iron and American pig-iron, while in bar iron there is a differ- 
ence of $14, and in steel rails of $17, in our favor against the 
foreign duty-paid price ; both of these, however, have to pay $7 
more for their pig-iron than the Scotch or English puddling iron- 
men and steel-makers have to pay. 

Most of our iron-men would object to a lowering of duties. 

^ This is the average ; the rates are from -^ to i^ cents a pound. 



73 

They will say, if steel or higher grades of iron are nearly as cheap 
as foreign iron, we maybe content and leave well enough alone and 
keep foreign iron out forever. They think of the golden harvest 
of 1879 to 1881, when prices jumped up from the lowest rates to 
the extent of the full duty and highest freight rate, a clear 100 
per cent, over previous prices. And this is undoubtedly the real 
cause of their persistent opposition to a thorough tariff reform. 
Such violent fluctuations and changes may be very pleasing to 
the iron-men, but are sources of great annoyance and loss to all 
the multitude of trades and manufactures who are dependent on 
these cruder forms as their material of manufacture. Every ex- 
porter and export manufacturer knows how difficult it is to form 
and maintain foreign connections on account of these fluctuations 
in the price of our raw materials. Many very profitable connec- 
tions established in the years of 1875 to 1879 were lost in the 
boom years, and had to be made over again after the boom had 
spent its force and when foreign trade was again considered good 
enough to help us out in our depression. 

Staple prices may not build up fortunes very rapidly, but they 
are a necessary foundation to a solid prosperity, and more apt to 
give us lasting happiness and contentment than the big fortunes, 
lost almost as quickly as they are made. Any one who knows 
any thing of the real nature and composition of prices must be 
aware that prices have always to fall back upon their true level, 
and that a rapid rise will be followed by a violent fall. 

Price regulation cannot be maintained under the free play of cojji- 
petitive forces. 

Now, to counteract these natural conditions, combinations to 
hold up prices are resorted to by the steel-makers. They resolve 
to limit the output and distribute production pro rata among the 
different plants. But when limited demand closes accustomed 
markets, decreased production follows as a natural consequence, 
combination or no combination. But still every one strives for 
the greatest share of possible business. Price regulation in 
times of depression is therefore easier ordained than maintained. 
Besides this, new factors will always come into play which 
will overthrow the finest schemes and machinations of the 



74 

combining forces. So, for instance, among all forms of iron 
steel is beginning to crowd out iron more and more, as has been 
said above. This is made very apparent by the last statement of 
file American Iron and Steel Association. While all other iron 
blanches report a lessened production, the product of the first 
half of 1885 was 763,000 tons of Bessemer-steel ingots, an in- 
crease of 40,000 over the first six months of 1884. The produc- 
tion of steel rails for the same two periods however were 523,251 
against 452,446 tons, a falling off of 70,000 tons. The difference 
went into other manufactures for which puddled iron had been 
used formerly, bars, plates, nails, etc. In all 300,000 tons went 
into other uses than rails from a six-months' production. This 
new use has been of recent date and of constant growth. During 
the last half of 1884 the excess of the amount of ingots produced 
over the amount of rails was 200,000 tons, or 100,000 tons less 
than the difference in production during the first half of the 
present year, a fact which shows the growing demand for Bessemer 
steel for purposes other than rails. All this ought to have assisted 
in maintaining prices, but instead of this, they have been declining 
to the time the combination was formed. But even this powerful 
organization will not be able to do more than pass resolutions, so 
long as the demand is not great enough to justify an advance. 
The present advance is only nominal, and large contractors could 
easily place contracts at old prices. All this in consequence of 
more works being in operation, all eager to keep running, than 
even the newly created demand can find employment for. Com- 
binations of this sort are like combinations of railroad lines in 
times of decreasing business demands, they are broken by the 
contracting parties as soon as made. They are made for the pur- 
pose of being broken, each one thinking the others will adhere to 
the bargain, and he deriving increased business from a concession. 
This is the unalterable result of business depression. The reverse, 
of course, follows times of increased activity. 

But another and far more powerful factor is the other point at 
work in price reduction, alluded to before — /. ^., the influence 
of the mind — that is, of new inventions, on price-making. A new 
process of steel-making, the Clapp-Griffith, is coming into use, 
which seems to revolutionize the steel trade the same as the new 



75 

steel-making process has neutralized a good share of the existing 
iron plant. Aside of the cheaper cost of erection, this new process 
has the great advantage by removing with great ease the silicon, to 
enable the use of our Southern and other cheap American ores for 
steel-making. It is calculated that the cost of converting pig-iron 
into steel at the blast furnace is three to four dollars a ton. Un- 
der such circumstances it will be readily admitted that there is 
not much room for kite-flying in prices. Open markets for our 
products would be a far more powerful stimulant to prosperity 
than anxious, timid exclusion. Open markets would give more 
expansion to the labor and profit share in the product, than even 
sanguine observers imagine. 



CHAPTER X. 

PIG-IRON THE COMPETITIVE ASPECT OF ITS PRODUCTION. 

Pig-iron holds to-day the key to the whole situation. For the 
last twenty years pig-iron was king. Pig-iron rules as completely 
our national destiny as cotton was in supreme control of our gov- 
ernment before the war of secession. The claims of pig-iron 
have always been of the most pretentious kind. It has always 
been considered a kind of sacrilege to inquire into the validity of 
these claims. I have therefore endeavored to bring under com- 
parison the territorial and other influences bearing on the produc- 
tion of pig-iron here as well as abroad. 

The principal reason advanced for the maintenance of the high 
duties on foreign iron has been the labor cost. It has been held 
that we can never make iron as cheaply as other nations. That 
we have not been able in the past, is indisputably in evidence. 
That we are making as cheap iron now in Alabama as can be 
made anywhere in England or Germany, is a complete refutation 
of the plea of the higher labor cost against us in the production 
of iron. The direct labor cost per ton of pig-iron has always 
been so small a percentage of the whole cost of iron, that it ought 
to have been apparent from the beginning of the controversy that 
there were entirely different causes to account for this higher 
price than direct labor cost at the furnace or at the mines. This 
labor cost is a given quantity at both ends of the line here and 
abroad, easily traceable, and a comparison will show that the dif- 
ferences, if any do exist, are of so trifling a nature that they would 
be more than balanced by transportation expenses and charges on 
foreign iron at ever so low a freight rate. But at the present time 
even this price difference of labor does not exist. 

Mr. Abram S. Hewitt informs me that at the works of his firm 
the present actual outlay for labor in a ton of pig-iron is $1.40, 
without any allowance for incidental expenses. The report of the 

76 



77 

Bureau of Statistics of 1872, page 539, gives the cost of pig-iron 
production in the United States from 1850 to 1871. Omitting 
the years of inflation we have the following data for labor : 1850, 
$2.22 ; i860, $1.87 ; 1861, $1.97 ; 1863, $2.07 ; from then pro- 
gressively rising until the maximum was reached in 1873 at $5.11. 
But this rising scale was proportionate to a general rise in pig-iron 
both as to selling price and wages all over the world ; Scotch pig- 
iron being quoted in England with average wages of miners : 

Price of Scotch pig-iron. Miners' wages. 

In i860 at 53s. 6d., or $12.87, per day at 3s. 6d.,or$.84 

In 1873 at 117s. 3d,, or 28.12, per day at 9s. I id., or 2.38 

But how does the labor cost of the present time on pig-iron 
compare to that of foreign low-priced labor ? The daily average 
wages of men employed at the blast furnaces in Rhenish Prussia 
in 1878, were 2s. 'j^d., or 63c. Mr. J. Lothian Bell, in " Manu- 
facture of Iron and Steel," gives an account of a blast furnace in 
Rhenish Prussia, which is worked by 117 men, who were paid 
collectively ^^5,581, or ^47 14^. per head, or $228.96. Their 
average yearly production for that year is given as 132I- tons, 
which makes the labor cost per ton come up to $1.66. 

Speaking of the output of German furnaces, Mr. Lowthian Bell 
may be quoted. He says in this connection : " None of these 
figures, however, are any approach to what is done by the work- 
men at the Cleveland furnaces, and illustrates what has been 
already observed in these pages, that well-paid and well-fed men 
are not always more expensive to the employer than badly-paid 
labor. As a matter of fact I have rarely found the wages on a 
ton of the furnace produce to amount to less than what I have 
found it to be in Cleveland." For every 20s. earned by blast 
furnacemen in the Cleveland iron district, Mr. Bell found the 
earnings in Westphalian iron-works to be from i2i'. to 135-. 

For Birmingham, Ala., the labor cost of producing a ton of iron 
was given to me by Mr. Lindley Vinton, President of the Vinton 
Iron- Works, at Indianapolis, who had just returned from a trip to 
the Southern iron district, as $1.66 a ton at the Sloss furnace at 
Birmingham, Ala. This is a general estimate of the cost. The 
men working at the furnace, are paid from 75 cents to $1 a day. 



78 

but there are 200 to 250 employed at a production of 150 to 180 
tons a day. These figures are supplied by one of the firm. Averag- 
ing the numbers given, we arrive at this result : 225 men at 87 J 
cents, divided by 165 tons, equal to $1.20, or at the most favorable 
productive situation of cheap labor, a saving of 20 cents a ton over 
labor in the Lehigh Valley. The furnace-owners, however, claim 
$1.66 as their cost, or 26 cents above the Lehigh Valley cost. 

But still, though the labor cost is nearly the same, Southern iron 
is now the great arbitrator and leveller of prices in the Eastern 
markets, and at a cost of $3.75 to $4.50 for transportation to the 
North, it can be landed cheaper at Northern points than Pennsyl- 
vania iron. 

The labor cost need hardly be considered then either in iron mak- 
ing or in mining. I could prove with equal facility that the dif- 
ferences of cost of mining a ton of coal, iron ore, or limestone are 
of an equally trifling nature in different countries or in the different 
sections of this country. 

The principal cause of the great price difference is the distance 
or proximity of the iron, coal, and limestone beds, which nowhere 
are better situated for purposes of cheap iron-making than in 
the Southern States, and perhaps nowhere so poorly situated for 
purposes of cheap iron-making as in most of the Northern States. 
This close neighborhood of all elements necessary in the produc- 
tion of iron saves a great item of expense, that of transportation of 
either one or the other of the materials. 

THE IMPORTANCE OF FREE ORE. 

Now, if our iron were ever so cheap — and it can be made in the 
South for $9 a ton — it would not be of use to us in steel-making 
unless we have a full and free supply of foreign ore, or foreign 
pig-iron, for mixing. The ores of the United States are too rich in 
phosphorus for Bessemer-steel-making, and they have to be mixed 
with fully one third of carbonaceous ores, mostly from the Mediter- 
ranean, to make them available for steel-making. Although Great 
Britain has an inexhaustible supply of ores, yet she has only few of 
the character wanted for steel-making. Many mines are not 
worked or worked to a lesser extent, while ore importation is in- 
creasing in proportion as steel-making is extending. 



79 

British imports of iron ore in 1884 were 2,728,672 tons, valued 
at pf 2,111,890, or $10,100,000, being $3.70 a ton. It does not 
cost one half that money to bring a ton of English ore to the 
furnace, nor of Southern ore to a Southern furnace. A Cleveland 
(England) miner earns ^s. ^d. (the rate of 1882) for a day of eight 
hours* work, in which he mines five tons, which is about 25 cents 
a ton. In the Southern mines near Birmingham, Ala., the mining 
expense of a ton of 50-per-cent. ore is 21 cents, clearing 8 cents, 
royalty 25 cents, and transportation to the furnace 25 cents, in 
all $1.04. In Western Germany the output is about two tons, a 
day of ten hours, per miner, for which he gets about 3 marks 40 
(or 81 cents), which brings the labor cost up to 40 cents a ton. 

Of course the labor cost varies widely with the nature and 
depth of the mine, the hardness of the rock, and the width of the 
vein. But even taking the highest rates paid here, it must be 
evident that the labor cost would not materially affect our iron 
miners were iron admitted duty free. So long as we circumscribe 
our industries by making them dependent in their materials on 
the cost of transporting the ores, etc., to badly situated furnaces, 
we cannot hope of ever gaining a position of lasting improvement. 
If we have to carry our ores from 500 to 1,000 miles of inland 
transportation to the furnace, as we have to do with many of them, 
where one ton at least is waste, but has to carry its transportation 
expense all the same, of course furnaces situated that way will be 
run down by others better situated. This is absolutely indepen- 
dent of any foreign competition. The forcible intervention of facts 
will bring this about. But it is wasteful to chain every industry 
to this forced situation, of upholding prices by government's 
action. 

That the tariff on ores does not help the miner under any 
circumstances will be seen from this, that in the last year, which 
was a year of low prices in this country and of low production, we 
still imported 550,000 tons of iron ore. 

We imported likewise 94,000 tons of Speigeleisen, 
and 197,000 " of pig-iron 

Total . , 291,000 " at a duty of $6.80 or $1,980,000. 

This tax, including that on ore, of J2, 392, 000 is laid directly on 



8o 

the Bessemer-steel industry, consuming these foreign materials, 
which we have to import, duty or no duty, so long as we keep on 
steel-making. Now to lay a duty upon ores or coal under such 
circumstances is simply barbarous. 

Ores cannot be produced by any labor process. They are a 
gift of nature. They canuot be improved or changed in their 
nature, if they do not possess the qualities and properties required 
in the process of working them into desired materials. The per- 
sistent imposition of a tax in the face of all these facts is a case of 
prevention of national activity by governmental interference. 

Good ores are not so plentiful in the world that we need fear 
being flooded with them from abroad if we removed the duties. 
The demand for them is too great all over the world. They are 
becoming more and more inaccessible to low labor cost on account 
of the gradual exhaustion of the surface layers. They would 
command the same, possibly higher prices, if we admitted all ores 
duty free. They would be a very important addition to our own 
working materials, which would be in so much better demand by 
the free admission of the foreign mixing material. As it is, our 
iron-makers in Pennsylvania and other Northern States are the 
greatest sufferers. They are frequently dependent in their sup- 
plies on rapacious railroad monopolies, who, if they are not con- 
trolled by competing lines in their charges, are only too eager to 
apply the principle of railroading, '' to charge what the traffic is 
worth." Of what importance this feature of cheap freight rates is 
in iron-making may be seen from this, that the iron-maker of 
Germany has a decided advantage over his English competitor, 
though his labor cost is higher, from the lowness of freights and 
the almost entire absence of royalties, as the mines are state 
property. In the Northern States the royalty at the present time 
of depression in the iron business is about 50c. a ton. In Ger- 
many coal and iron lands are state property. The royalty paid on 
the former by the colliery owner is 2 per cent. ; hence if the sell- 
ing price is $1.50 per ton the royalty would not be more than 3c. 
Iron ore pays no royalty. The relative positions of the principal 
iron states as to royalties in a ton of pig-iron on ore and coal is, 
according to Lowthian Bell : Great Britain, Cleveland district, 
78c. ; Scotland $1.44 ; Cumberland $1.50 ; Germany 12c. ; France 



8i 

i6c. ; Belgium 30c. to 96c. In the Northern States of America the 
combined royalties would not be much different from those of 
Scotland. Pennsylvania iron-masters are beginning now to extend 
their operations to the Southern mining lands, buying lands and 
erecting furnaces. With the best modern appliances, cheap 
mining lands, no freights so to speak, iron will be made at prices 
as low as in any foreign country. The plan is now under con- 
sideration to raise capital for the purpose of extending water com- 
munication so as to enable carrying the furnace product direct to 
Mobile Bay. This advent of cheap American iron must neces- 
sarily break down all tariff walls, as the duty cannot possibly any 
longer protect but only debar home iron from the extended use it 
would find if foreign irons necessary for mixing, as mentioned 
above, could be had as free and cheap as they can be landed. 

It is with iron as with wool. Unless the ores have the neces- 
sary requisites for making this or that kind of iron, this or that kind 
of steel, or for mixing with other kinds of ores to produce a 
desired kind of iron or steel, their value decreases in proportion 
to the difficulties placed in the way of reaching the combination 
material. Nowhere can ores be found in one spot which combine 
all qualities required by our complex industrial exigencies. The 
whole question of pig-iron making resolves itself into one of inter- 
mediate charges from the mines to the furnace. Labor must not 
be drawn into this question. It has nothing to do with it. It has 
been shown that the labor cost of this crude product on each 
item is nearly equal in most countries. It has been shown that 
where labor is paid highest by the day the output is largest, and 
that the difference is equalized thereby. 

We have to discover what is different, and we have not far to 
reach in pointing it out. Indeed we have done this above, and 
have only to draw the final conclusion. 

I. ROYALTIES. 

For Germany we can trace back as far as the fourteenth cen- 
tury, that the feudal lord holding fief under the empire claimed 
royalty from those using the mines. Every individual could work 
them who paid his dues, and was in turn protected in his rights 
acquired thereby. The present German (Prussian) law seems to 



82 

have sprung from a self-developed Bergrecht — the law governing 
the working of mines, — based on the principle that mining-lands 
are a trust held for the community at large, and not a piece of 
property at the mercy of any single individual. The German law 
makes it impossible to the speculator to capitalize the soil, print 
shinplasters, and call them millions or hundreds of millions of 
marks or dollars. The law makes it impossible to victimize the 
poor innocents, who pay their well-earned money in exchange for 
finely lithographed papers, to find out soon enough that they 
have been the dupes of confidence operators. By the time the 
public discovers how they have been swindled, the operators who 
started the enterprise have usually cleared the field. 

The German law makes it equally impossible to operators to 
buy up the mining lands of a whole region for a trifling sum, and 
clap a high tax on every ton of coal or ore that is taken from the 
soil, as is the practice in America — a tax often higher than the 
whole labor cost of taking the stuff to the surface amounts to. 
Were the coal and iron lands the property of the State, a charge 
of lo cents would more than supply the State of Pennsylvania 
with all the revenue needed for its government, and give the 
people iron and coal so cheaply that the manufacturers would not 
need tremble at the great enigma which every new development 
presents to them. In close connection with this is : 

2. THE TRANSPORTATION QUESTION, 

which in Germany is also largely to the advantage of the pro- 
ducer In this country, on the contrary, the companies who own 
the mines — Reading, Lackawanna, etc. — in most cases own the 
transportation lines which bring the coal to the furnace. Unless 
prevented by parallel lines, the charges are frequently so high that 
they make profitable manufacturing at times impossible. Phila- 
delphia, the high-school of protection, is now raising a cry of dis- 
tress against what it calls unjust discrimination. But all protection 
or legislation benefiting the few is unjust discrimination, and — 
Philadelphia ought not to complain. 

The high royalties and the excess of transportation charges, 
based on excessively watered valuation of mine- and railroad- 
property paid by some of our furnaces, would more than cover the 



83 

labor cost contained in a ton of pig-iron. Our Southern pig-iron 
furnaces, which are free from these grasping charges, will find this 
to be their sole advantage. We are paying high taxes on the very 
essence of profitable manufacture, cheap raw materials, to enrich 
mine-owners and transportation companies. It is gross injustice 
to tax the millions, to close the gates to foreign commerce, in 
order to enrich the projectors of gigantic financiering operations. 
The protective tax abolished, the force of competition would press 
these private tax-gatherers to the wall, not labor. To an extent 
this will ensue even now, through the introduction -of Southern iron, 
which under intelligent and economical management can be sold 
with a profit at $io, and at Jg even under close pressure, instead 
of $15, the lowest price at which Northern iron (Grey Forge) is 
sold now. 

Though it cannot be used readily for Bessemer steel, on account 
of being too rich in phosphorus, yet for merchant and other forms 
of iron it does excellent service. It can be used with equal 
advantage in the production of Clapp-Griffiths steel and in the 
Thomas-Gilchrist process. 

*' If the South should engage in the manufacture of Bessemer 
steel to a greater extent than it has yet done at Wheeling it would 
probably employ the Thomas-Gilchrist process, which requires 
that pig-iron should be high in phosphorus, that the work of elimi- 
nation in the converter may be completely successful ; or it would 
employ the Clapp-Griffiths process, which is said to permit the 
presence in the steel itself of a large percentage of phosphorus 
without detriment to its quality, a result which is only rendered 
possible by the rigorous exclusion of silicon." 

These are the words of Mr. Swank, the Vice-President of the 
American Iron and Steel Association, taken from the latest 
reports. Connecting this with what was said above, we can safely 
say that our whole protective system has outlived itself, that 
from the highest to the lowest form of iron, from the machine to 
the ore, every form is vitiated by parasitical undergrowth. Health 
and vigor are thus prevented from getting the mastery in an other- 
wise strong organism. 



CHAPTER XL 

THE NATURE AND COMPOSITION OF PRICES. 

We have now closely followed the methods of production of 
different nations. We know the part the producing classes take 
in the making of the product. This knowledge gained, however, 
does not yet give a full insight into the nature and composition of 
prices. We see prices of commodities rise and fall without any 
great reference to tangible facts. At this present time especially 
we live in a period of declining prices. Economists are engaged in 
attempts to find solutions. The explanation which finds most 
favor, is the money view of the problem. Mr. Goschen, of Eng- 
lish fame as a financial genius, was, to my knowledge, the first 
to take in hand the task to give an explanation of the decline 
in prices in general and especially so in British estates. He did 
not have to go very far in search for this explanation, as he had it 
all ready at hand. It is the lessened output of gold. He attributes 
the decline of prices in all commodities directly to the decrease in 
the output of gold. Mr, Giffen, the Secretary of the British Board 
of Trade, has lately taken up the same side of the argument. The 
high esteem in which such writers are held, of course, elevates their 
reasoning at once into a kind of stock-in-trade argument of writers 
on that question in England, Germany, and America. A theory 
so easily handled as the money theory, with all the accessories 
which this term may imply, including fiat money, silver money, 
gold money, interchangeable, redeemable, non-redeemable money, 
of course is always a safe refuge for theory-builders. If history 
however were ever studied with a view of bringing out facts, 
it would be very hard work with builders of theories to find 
material for their thesis. But a man enamoured with a theory is 
never very materially interfered with if facts go against him. Mr. 
Goschen might have found out that it took fifty years and more in 
Europe until the very rapid addition to the world's stock of pre- 
cious metals by the discovery of America made a perceptible im- 

84 



■ 85 

pression on prices. Mr, Goschen, however, is able to trace a recent 
severe decline of prices to a lessened production, which is of no 
later date than the last few years. But by actual measurement we 
find that the decrease in the metallic output is so insignificant that 
the effect could certainly not be immediately observable. 

Before proceeding further let me state the facts as to the produc- 
tion of precious metals during the last fifty years : 

THE world's production OF GOLD AND SILVER FROM 1831 

TO 1881. 





Mulhall. 




Gold. 


Silver. 


1831-40 .... 
1841-50 .... 
1851-60 .... 
1861-70 .... 
1871-80 .... 
I88I 


$140,000,000 

370,000,000 

1,360,000,000 

1,275,000,000 

1,150,000,000 

100,000,000 


$270,000,000 
335,000,000 
390,000,000 
530,000,000 
830,000,000 
80,000,000 




$4,395,000,000 


$2,435,000,000 



For the last ten years Mr. Burchard, the director of the United 
States mint, sets down the world's product and that of the United 
States as follows (millions $) : 









Gold. 








Silver. 




U.S. 


World. 




U.S. 


World. 


1874 . . . 


33-5 


II3.5 


1874 . . 


37-3 


82.0 


1875 . 






33-5 


II3-5 


1875 






31.7 


82.0 


1876 . 






39-9 


114.0 


1876 






38.7 


98.0 


1877 . 






46.9 


114.0 


1877 






39-8 


81.0 


1878 . 






51.2 


119.0 


1878 






45-3 


94.9 


1879 . 






38.9 


108.7 


1879 






40.8 


96.1 


1880 . 






36.0 


106.4 


1880 






39-2 


96.7 


I88I . 






34.7 


103.4 


1881 






43-0 


102.0 


1882 . 






32.5 


98.7 


1882 






46.8 


IIO.O 


1883 . 






30.0 


94.0 


1883 






46.2 


II4.2 


Totals 






377-0 


1,084.0 


Total 


s . 




408.8 


957.0 



86 

The recent decline in the production of gold from the largest, 
the decade of 185 1 to i860, is 28J per cent., and from that of the 
decade immediately preceding, only i6f per cent. In estimating 
the future yield not sufficient weight is given to new fields likely 
to be opened, or to larger returns of old ones under more scientific 
management. So, for instance, Russia, which gave to the world 
during the fifteen years of 1868 to 1882 at the average rate of 
;£'4, 4,00,000 a year, produced in 1881 ;£^5, 940,000. What Central 
and South America, traversed by railroads and diffused with new 
life-blood by thus opening its immense tracts, would yield to the 
future, is merely conjecture. As a matter of speculation it can 
have no bearing on the present situation. I simply make mention 
of it to show that a gold famine is not necessarily threatening us 
even as a remote possibility. So far as the present situation is 
concerned as a price-making factor it will be seen that the last- 
named year has given us (in one single year) two thirds as much 
gold as was the output of the whole decade of 1831 to 1840. 

It must be remembered all the time that gold is not eaten up 
like the year's crop of food, or worn off like our fibre products. 
The gold stock is cumulative, and the findings of to-day are simply 
an addition to the findings of yesterday. 

Hence the slight decrease in gold production does not give the 
careful economist any right to base general conclusions upon the 
fact, the more as the possible influence upon prices, if such were 
to be admitted for the sake of the argument, is more than counter- 
balanced by increased silver production. Silver, I may be an- 
swered, is demonetized in many countries, and thus a severe strain 
is put on gold. Silver, however, is still the great circulating 
medium of the world, excepting Great Britain, Germany, and the 
United States, where, in the latter country, it is held as a reserve 
for a limited amount of paper circulation. Silver is held at the 
present day as part of the reserves of the banks of France in about 
equal part to gold, two to one of gold of the Bank of the Nether- 
lands, in like proportion by the Bank of Austro-Hungary, and of 
Russia to a similar degree. But even in Great Britain the esti- 
mated amount circulating is in but a slightly smaller proportion to 
gold than in 1848. Mulhall estimates the ratio of gold to silver 
for 1848 as ;^55,ooo,ooo to ;£^ 11,000,000, and for 1880 at ^^124,- 



87 

000,000 to ;^ 19,000,000. All of which is to prove that silver is 
yet a very important factor as a circulating medium, and that its 
effect upon prices has to be counted likewise when the delinquency 
of gold is being taken to task. 

It will thus be seen that the production of precious metals for 
the twenty years previous to 1850 was $1,100,000,000, and for the 
thirty years succeeding 1850 was $5,500,000,000. Besides all this 
vast increase of treasure we have yet to take into account the in- 
crease in the excess of paper money not covered by specie reserves, 
estimated for 1850 as $450,000,000, and for 1880 as $2,150,000,- 
000, an increase in round numbers of $1,700,000,000, which gives 
us a grand total increase in circulating mediums of say p£^ 1,500,- 
000,000 sterling or $7,500,000,000 in round numbers. There is 
another factor to be remembered : the extension of the banking 
system, through which checks are assuming the functions of 
money, making it so much less of an indispensable necessity ; 
stocks, bonds, bills of exchange, etc., all serving as money in 
effecting clearances between nations and nations, and checks ful- 
filling the same mission between individuals of the same nation to 
a far greater degree than at the time gold diggings were begun in 
California and Australia. But I will waive this point and simply 
return to our money increase, equal in amount, dollar for dollar, 
to the increase of the foreign commerce of all Europe and the 
United States twice over, and behold, what an inflation we have 
before us ! Ought not, according to the price theory of Mr. 
Goschen and his disciples, prices be away up in the skies ? They 
would be rather so if prices were only partially as much influenced 
by the amount of gold or silver as is usually assumed to be the 
case. But how does the case stand ? How do prices compare 
with say fifty years ago, when precious metals were indeed scarce 
and less by $7,000,000,000 (less what has been destroyed by 
abrasion, etc.) than at the present time ? Is there any foundation 
for any of these time-honored assumptions ? Have we not before us 
a repetition of the puzzle which upset so many scientific minds at 
the time, namely, why water does not increase in weight when fish 
are put in ? It will be remembered that a very plain matter-of- 
fact man proved the puzzle to be a hoax. Experiment proved that 
the weight was actually increased to the extent of the weight of the 



fish put in the dish of water. So it will be found with the nature 
of prices when we trace them back, say fifty or a hundred years, 
and compare them with recent periods. Most people are satisfied 
if they look back a few years, note the change which has taken 
place, ascribe any reason readily at hand as the explanation of a 
phenomenon which may perhaps be as transitory as the real cause 
be remote from the one selected. If such explanation once has 
gained currency among the scribes, we hear the thing repeated with 
the same amount of thought as is expressed by the Buddhist priest 
in turning the crank of his prayer-mill. Many causes given in 
explanation of phenomena are borrowed from reasoners whose 
deductions might have been correct emanations of the data of 
their day. But how wonderful have been the changes wrought by 
the development of our age ? How great the miracles created by 
the inventive genius of man ? The work of ages is moulded in 
years. Distances are absolutely neutralized, and the whole world 
as to neighborhood is like adjoining villages of a hundred years 
ago. And with all this thought-like exchange of intelligence and 
commodities made possible by this rapid advance of events, the 
slow and measured philosopher is still satisfied if he can patch up 
a threadbare theory so as to serve in covering a world-wide change. 
Most reasoners fail so formally in their science because they lose 
sight of the fact that phenomena are born and fed by a multitude 
of causes, which have to be explained and understood in order to 
give weight and substance to deductions and theories based thereon. 
Without this, let us say, universality of investigation, false theories 
arise which may dazzle perhaps for the moment, but they will dis- 
appear after having created the mischief which necessarily and 
absolutely must follow in their wake. 

Now as to prices, how do they appear under the glare of com- 
parison ? We have to take English prices and make allowance 
for fiscal changes so as to bring them as near as possible to a net 
basis. Take wheat, the most important commodity and the one 
most reliably quoted. From 1765 to 1791 (previous to the time 
when a new corn law was enacted putting a heavy duty on wheat 
when below 50^.), for a period of twenty-five years, wheat averaged 
53^. the quarter, the lowest and highest prices being ^6s. in 1779 
and 59^-. in 1773. I will not bring here the years following before 



89 



the abolition of the corn laws, when prices were ranging from 605. 
to I20J'. Artificially advanced by corn laws, and under the influ- 
ence of famine, war, and scarcity, they would not be properly 
brought in here. I will commence with 1845. The average 
prices of five-yearly periods were as follows : 



1846 to 1850 

I85I " 1855 
1856 " i860 
I86I " 1865 



52J. 


1866 to 1870 


S6s. 


1871 " 1875 


SS-s-. 


1876 " 1880 


48J. 


1881 " 1884 



48J. 
42s. 



In December, 1884, wheat was 30^. 5^. This price was not 
reached for the last one hundred and twenty-four years. 

This, however, takes us back into the period of low prices, 
which ruled in England for fifty years back of 1764. But even 
then we only count ten years when wheat was ^os. or under. 
From 1646 to 1715 the average price of wheat was 44s. the quarter. 

Mulhall compares prices of 1845-50 and 1883 of sixteen articles : 



Coffee 


100 


82 


Leather 


100 


139 


Copper 


100 


80 


Meat 


100 


145 


Cotton 


100 


89 


Sugar 


100 


60 


Cotton-cloth 


100 


92 


Tallow 


100 


III 


Cotton-yarn 


100 


100 


Tea . 


100 


76 


Flax 


100 


68 


Timber 


100 


108 


Iron . 


100 


79 


Wheat 


100 


77 


Lead 


100 


83 


Silk 


100 


126 



The price of raw silk has gone down considerably since 1883. 
A smaller demand, caused by changing fashion, has brought this 
about. A price comparison of to-day with 1847 is given on page 

91- 

Meat and leather are the only articles which show a marked 

increase. Timber and tallow come next, but the rise is so small 
that, in comparison to declines ranging from eight to forty per 
cent, on ten of the most important articles of consumption named 
in the above list, they can be passed over, as not very mate- 
rial, for briefness' sake. The great rise in meat, however, has to 
be dwelt upon more fully. In perhaps no other article of food 
have the fields of supply been so extended beyond those in exist- 
ence before the advent of the era from which our inquiry starts — 
that previous to the great gold-finds and the abolition of the corn 



90 

laws in England, — as in that of meat. From America and Australia 
immense stores are shipped to Great Britain both in live and dead 
meat. 

Canada and the Argentine Republic are getting more and more 
into line as purveyors of the British markets, not mentioning 
the many countries of Europe, who are still shipping not unim- 
portant quantities to foreign, mostly English, markets. The 
imports for 1883 are, by the Board of Trade reports : 

In living animals ...... ^11,978,000, whereof the 

United States supplied ;i^3,700,ooo 

And in dead meats ...... ^16,202,000, whereof the 

United States furnished ^4,500,000 

Or a total of ;,^28, 180,000 or $140,000,000 

The total importation in 1868 was ;£6, 000, 000 or about ^ of the 
present time. The extent meat production has taken in the 
United States during the last ten years is so great, that figures 
compared with those of previous decades would make those of 
say 1850 appear quite out of proportion, even if divided pro 
capita. Outside of the $100,000,000 we export in living animals, 
provisions, and lard, all our immense production is consumed at 
home. If the consuming power were not greater than say 1850, 
meat prices would be much below those of that period, while on 
the contrary they show a very formidable increase. The con- 
suming capacity of the poorer classes has risen in the ratio in 
which the quantity produced has increased beyond the ratio of 
increase of population, multiplied by the price increase. If the 
consuming power and producing power had kept even step, the 
price would not have increased. The price increase shows dis- 
tinctly that the consuming power is still ahead of the supply. The 
indications, however, are that production will keep on increasing, 
and that price decline of meat will be chronicled shortly as surely 
as the wheat decline is now one of the staying forces. 

The consumption of meat in France has nearly doubled since 
1840, while it has more than trebled in Great Britain. This 
makes it certainly clear that the rise in the price of meat, etc., is 
due to the perfectly natural cause of supply, insufficient for the 
greatly increased demand, and not to causes adduced by subli- 
mated theory. 



9T 



The increase in the price of leather and tallow can be traced to 
the same source : greater power of consumption of the working 
classes. The working classes are far better supplied with boots 
and shoes than in the former price-era mentioned above. 

Comparing prices given by Tooke, (" History of Prices ") for 
1847, with price quotations of my own research from ruling 
(English) market quotations, we find the average to be this : 



In the two periods. 


1847. 


1885. 


Copper cakes, per ton ..... 


$458.00 


$238.00 


Bar iron, per ton 










48.00 


31.00 


Lead, pigs, per ton . 










gi.oo 


52.00 


Tin, bar, cwt. 










24.00 


16.00 


Cotton, American, lb. 










0.12 


o.iof 


Silk, Italian 










5.00 


4-30 


Refined sugar, bonded, cwt. 










7-68 


3-84 


Tea 










0.60 


0.30 


Wool, English . 










0.48 


0.22 


Wheat, quarter . 










16.75 


7.92 


Wheat, bushel . 










2.10 


0.99 



[I have changed English money quotations to American, as the reader is more 
used to them.] 

There is no doubt that if all other things had remained the 
same, the enormous increase in circulation would have brought 
up prices to a greatly higher basis. That prices are not higher, 
but far below the price era of 1845 to 1850 — not by any means 
one of high prices, — makes it certain that other things did not 
remain the same, but underwent such changes that thereby not 
alone were obliterated all effects of the large additions to the 
existing mediums of exchange, but that they contributed largely 
to a still lower scale of prices from that ruling when money was 
comparatively a scarcity. I have simply mentioned raw materials 
and food products. Manufactures, it is well known, are on the 
whole cheaper yet, as the application of labor-saving machinery 
has been even more potential in price-making in this line of 
human industry than in the production of simpler articles. That 
we had intermediate periods of higher prices, is a known fact. 
They were, however, traceable to causes which by their presence 
and disappearance always proved to a certainty that it was not 



92 

the plethora of money which caused price increase. It would be 
useless to count them up here. The wars of the last thirty years 
were such terrific destroyers of property and commodities that they 
alone would suffice to explain to a very large measure the oscil- 
lating nature of prices. But that the tendency has been a down- 
ward one, instead of a rising one, is so clearly proven by the 
above that it would be a waste of words to add any thing further 
to the proof. That this has been so, proves sufficiently, that there 
are far more powerful factors at work in price-building than cur- 
rency or the precious metals. It remains now to mention what in 
effect are the main tentatives in the construction of prices, when 
it will be seen that nothing less than the whole social fabric is 
tributive to and dependent on price-making and its factors. 
Though there may be a multitude of causes, yet we can only be 
concerned in those of a general and therefore permanent influence. 

1. Land and its tenure, including natural forces. 

2. Production and its methods. 

3. Transportation. 

4. Taxation and laws. 

5. Currency and money. 

6. Interest and capital. 

7. Distribution and profits. 

That prices and price-making influences cannot be considered 
from the narrow standpoint of a community or a nation, but of 
the world at large, can be illustrated by two examples. The 
doom of English and Irish landlordism is a foregone conclusion, 
pronounced and decided upon, not by a committee of foolish 
terrorists and dynamiters, but by the peaceable settlers upon free 
and cheap lands at 5 to 10,000 miles distant from the manorial 
estate. I may be answered that this detrimental influence is 
caused by the free access of foreign grains to British markets, 
which the Prussian junker is trying to overcome by laying a tax 
upon foreign food supplies. The possibility that the British peo- 
ple will ever submit again to a tax on their food in order to secure 
the permanency of a land-holding aristocracy is not very promis- 
ing. Farming, it can be shown, is as profitable in England as any- 
where, provided it be freed from its encumbrances. But, like any 
other industry, farming cannot carry two profits when competing 



93 

nations are satisfied to carry it on with one profit. The plea of 
the small rate of interest which the rent yields to the landlord — 
2 J- per cent. — we need not consider, knowing that valuation has 
been more than quadrupled, and a rent of 2J per cent, is to-day 
one of 10 per cent, on the valuation of fifty years ago, and on the 
product of the same acre. 

Mr. Wm. J. Harris, M.P., has lately contributed to the London 
Economist a paper on '* The Saleable Value of the Produce of 
English Farms." He gives a detailed account of the value of 
English farming. 

VALUATION OF THE SALABLE PRODUCE OF THE SOIL OF ENG- 
LAND AND WALES. 

"Wheat — Bushels. 

England 2,530,711 acres, at 

29 bushels . . . 73,390,619 

Wales . . 77,611 acres, at 

24 bushels . . . 1,862,664 



2,608,322 75,253,283 

Deduct seed (2 bushels per 

acre) .... 5,216,644 



Barley — 

England . . 1,808,408 

acres, at 35 bushels . . 63,294,280 
Wales . . 129,856 

acres, at 29 bushels . . 3,765,824 



70,036,639 at \s. 3^. per bushel ;^ 14, 882, 785 



67,060,104 



Deduct seed (3 bushels per 

acre) .... 5,814,792 



Oats- 
England . . 1,620,264 

acres at 44 bushels . . 71,291,616 

Wales . . . 249,204 

acres at 35 bushels . . 8,722,140 



61,245,312 at 4J-, per bushel . 12.249,062 



80,013,756 



Deduct seed (4 bushels per 

acre) .... 7,477,872 



72,535,884 at 2^-. Sfl'. per bushel . 9,670,195 

Beans, peas, and rye — 692,000 acres, at £"1 per acre . . . 4,844,000 
Straw used for feeding cattle, or sold, from 6,400,000 acres, at £i 

per acre, the rest used on the farm as bedding and thatch . 6,400,000 

Turnips . . . 1,542,612 acres, at ;^6 per acre . . 9,255,672 



94 



Potatoes . . . 401,000 acres, at £11 per acre 
Mangolds . . . 302,069 acres, at ^ 9 per acre 

Carrots . . . 12,080 acres, at £\o per acre 

Vetches, trefolium, etc. 389,000 acres, ^\. £ ^ per acre 
Clover, sainfoin, and j 1,755,000 acres for hay, £^ per acre 



rotation grasses 

Permanent pasture 

Hops, flax, etc. . 
Feed on 



\ 1,100,000 acres not for hay, £2 per acre 
4,523,000 acres for hay, £/i, \qs. per acre 

10,060,301 acres not far hay, ^^2 ioj. per acre 

71,000 acres, computed at 
8,000,000 acres waste land, 3^. per acre 



Orchards, market gardens, etc., about 246,000 acres, ;i^20 per acre 



Deduct for feed of work horses used solely in agriculture, 
847,592, at ;^20 per horse per annum 



4,812,000 
2,934,541 
120,800 
1,945,000 
8,775,000 
2,200,000 
18,103,500 

25,150,775 
2,000,000 
1,200,000 
4,920,000 

129,463,330 

16,951,840 



112,511,490 
. 6,500,000 

;^I 19,000,000 
;^I 19,000,000 



To this must be added from other sources 

Which gives a total product of . . . 

From this gross product ..... 

Are to be deducted first, the following burdens : 

Local rates applying exclusively to agricultural 
land in England and Wales, including edu- 
cation rate, whether it be levied by volun- 
tary rate or otherwise .... 

Tithes 

Land tax, redeemed and unredeemed 

Income tax, schedule B, deducting abatements, 
say ........ 

Legacy, succession, and probate duties affecting 
agricultural incomes ..... 

Stamps on deeds affecting agricultural incomes 



2. Labor of 870,000 agricultural laborers, not 

counting 40,000 women, averaging 15s. a 
week ....... 

3. Incomes from the value of land, according 

to schedule A, of the income tax 

Leaving the farmer's income 

besides what means of support he derives directly from the farm for himself 
and family. 

From this sum ;^4,ooo,ooo must come off for manure purchased, 
besides all outlays for repairs, living, etc., while ;£^ 43,000,000 go 
to the small number of landholders. This showing is a plain but 
unanswerable argument against the possibility of maintaining the 
English land system any longer. With all the love of the British 
people for the show business, and their willingness to pay a big 
round sum for the privilege of possessing a great titled nobility^ 



;^7,ooo,ooo 




4,000,000 




1,700,000 




480,000 




900,000 




500,000 




;^I4, 580,000 




34,700,000 




43,000,000 


92,293,000 


. . • 


;^27,000,00O 



95 

the price they pay annually is rather in excess of the value of this 
rare piece of archeological curiosity. The current of undisturbed 
competitive forces is all drifting toward the interest of the pro- 
ducing classes. The free access of foreign-grown food into Great 
Britain, through the means produced by modern invention, must 
necessarily lead to the distribution of the income of class A, for 
the benefit of the farmer and the agricultural laborer. The com- 
petitive forces of the near time are so severe, that not more than 
one profit can maintain where formerly two and three were charged 
on the product. 

That the influences referred to, which the outside world exer- 
cises upon prices, cannot be guaranteed against by taxation and 
protection for any long period, can be shown by my second exam- 
ple, that of the woollen industry in the United States. 

Here we had a system of protective taxation spun out to the 
finest point by all parties interested in the production of wool 
and in the manufacture of woollens ; yet there is no industry in 
the country so completely disorganized and disrupted as this 
dearest of all our nurslings. There were twenty years of the full 
application of the artificial device. But what are the results ? The 
infant is absolutely confined to the nursery, while foreign manu- 
factures are brought here, increasing in value and bulk every year. 
The price-making factor operates so powerfully in Australian 
wools that wools outside of the United States have become so 
much cheaper than our wools that the fabrics made of foreign 
wools in foreign countries can be landed cheaper, duty paid, in 
this country than we can make them here. In consequence, not 
only American woollens but American wools have been becoming 
a drug in our markets, all because the sun and the soil and other 
conditions are more favorable to sheep-farming in Australia and 
the Plata country than in the United States. 

A clear understanding of the nature and influence of the men- 
tioned causes on prices must make it apparent that those nations 
are most favored in the exchanges of the world who give these 
influences fullest consideration. A nation who would make every 
one of the named subdivisions subservient to the great idea that 
every burden on any of them is a burden upon the whole, arid 
principally upon the laborer who has to carry them all, would be 



96 

the first to reap the fruits of unexampled prosperity of all its 
individual members. Every commodity offered for exchange 
contains all the elements of prices. Every price-making element 
is contained in the smallest unit as well as in the whole quantity of 
national production. Wherever people are oppressed, it is through 
the uneven distribution of burdens on either one or the other or 
on all the price-making elements, and inquiring into their bearing 
upon prices must therefore be the first task of political economy, 
which above all must be one of the exact sciences or nothing. 



CHAPTER XII. 

THE TRUE VALUE OF OUR ANNUAL PRODUCTION THE SHARE 

THE DIFFERENT CLASSES HAVE IN ITS DISTRIBUTIVE VALUE, 

The question may be raised : What is the possible limit of the 
earning capacity of the individual, if all employed in useful 
and gainful labor were remunerated alike in money of the day, 
upon the basis of valuation and productiveness of the year 1880 ? 
To arrive at a clear understanding upon this, is the more import- 
ant, in view of the vague estimates upon which so much of the 
criticism of the day is based, and from which so much agitation is 
evolved. 

The estimates vary so widely, from $500 to ^2,000 per capita of 
those employed in productive enterprises, that it is well to estab- 
lish a correct, scientific basis of earnings. No country is better 
equipped to give full answer to an inquiry of this sort than the 
United States. No country possesses so complete a system of 
census enumeration of necessary data to this end as the United 
States. It is true much may be desired yet, to supply greater cor- 
rectness, but the lines covered are the ones necessary for our 
inquiry, and are covered by our government only. England's 
census does not give valuations of earnings or production. Com- 
plete as the Board of Trade reports are in other directions, they 
do not cover any thing pertaining to this column of national 
statistics. 

Germany's national statistics are of recent growth, and are less 
complete than the British. France has at various times under- 
taken government inquiries by commissioners appointed to that 
end, and gives us in general outlines enough to make comparisons, 
though in classification and fulness much is wanted to bring the 
information up to the work of the United States. We have intro- 
duced a system of inquiry which, in parallel lines of decades, 
brings facts and figures to bear upon the situation, which, rightly 

97 



98 

understood and cleared from dross, ought not to leave room for 
much doubt or vagueness in the unit of earnings per capita of 
those occupied in useful occupations, or of the total of the earn- 
ings of the nation. 

To arrive at the per-capita share, we have to establish first the 
sum-total of national earnings. This we can do by taking the dif- 
ferent divisions of census compilations. In adding them up, 
taking each as given, many commit the grave error to use the 
same figures two and three times over and again. Freed from all 
repetition of the same items, we have the following data as a 
basis : 

(i) Agricidtiire. — The census figures give " estimated value of 
all farm productions (sold, consumed, or on hand,) for 1879" as 
$2,213,402,564. 

Mr. J. R. Dodge, the " Statistician of the Department of Agri- 
culture, and Special Agent of the Census for the Collection of 
Statistics in Regard to Agriculture," is, however, not satisfied with 
this estimate, which, by a tabulated statement, he raises to 
$3,726,331,422, farm value. I do not wish to enter very closely 
into the scrutiny of the items. The difference, however, is so 
beyond all possibility, if the census estimates are to be considered 
of any value whatsoever, that a few critical side glances are 
important. 

First, as to valuing the produce. I will show the excessiveness 
by a few examples. By placing side by side the valuation which, 
according to Mr. Dodge, is the value on the farm, and the average 
export price for the year, given by the Bureau of Statistics, which 
includes all the transportation expense from the farm to the sea- 
board, all the charges and profits of middlemen, storehousing, 
etc., we shall see at once the unreliability of these '' official 
figures." The humorous side of it is apparent, when we state 
that Mr. Nimmo, the late chief of the Bureau of Statistics, fully 
endorses the estimate of Mr. Dodge, while at the same time he 
gives to the public his official statement of the average Export 
Prices of Domestic Merchandise, 



99 



1879. 



Farm value, according 

to Mr. Dodge and 

Mr. Nimmo. 



Export price, according 
to Mr. Nimmo. 



Wheat, per bushel 
Indian corn, per bushel 
Oats, per bushel 
Rye, '• 
Cotton, per lb. 
Wool, 
Tobacco " 




$1,068 
.471 
.297 
.646 
.099 
.29 
.078 



I have selected for this comparison the most important of our 
agricultural products, which give food and raiment to our people, 
and besides this furnish the bulk of our exports. Fancy the 
happy position of our farmers if their product were not alone 
shipped to the farthest home market free of all charges of trans- 
portation, but that every middleman and his assistants, the banker 
and merchant, were all engaged in a sort of benefit society to the 
agricultural population, and to that end not alone throw in all 
their labor free of charge, but besides give him, out of some 
unexplained fund, a bonus above the export price as below, all 
for the privilege of being permitted to help " building up the 
country," as in these items : 

Excess of farm price over export price, according to Dodge and 

Nimmo. 



Oats, per bushel 

Rye, 

Tobacco, per lb. 



$0,063 
.116 
.007 



Excess of export price over farm price, as per Dodge and Nimmo, 

Wheat, per bushel ...... $0,117 

Indian corn, per bushel , . . . . .075 

Cotton, per lb. ...... . .001 

Wool " 01 

Or imagine the nearness of the millennium to our rural friends, 
if their wheat could be brought from Dakotah or Illinois to New 
York and put on board the steamer, free of all other charges, for 
ii-fV cents, and Indian corn for 7 J- cents a bushel, and receive the 
balance in cash. 

Wool, as is well known, in the condition in which we market it 
would in 1879, averaging the different grades, not have brought 



lOO 

28 cents in New York ; far less in the Western States and Terri- 
tories. The whole concoction is so absurd that it surely would 
not have been produced had it not been to serve a political end 
then in view, which, fortunately for the country, was not reached. 
I have to scrutinize the figures, however, as they have been made 
the basis of calculations of wealth and incomes by economists of 
national reputation, who might have been expected to throw more 
critical acumen on this matter. Unless the foundation of our 
estimates of wealth-creation is correct, all our superstructures 
will be as built on sand. 

An item of the table of Mr. Dodge, introduced to swell his total 
to $3,700,000,000, is meat production on farms — $800,000,000. 
We have to strike out the most of it. The feed of -cattle, of hogs, 
etc., is raised on the farm, and counted as farm produce. We 
cannot count it twice, first as root crops, hay, and corn, and then 
again as meat. 

It has been doubted by writers of note and experience on agri- 
culture whether meat-raising on farms is any more profitable than 
the raising of the feed. To this, however, must be brought in 
remembrance, that we, at least, could not obtain the price of feed 
or of other agricultural produce we get now, were it not for the 
prodigious quantities we consume in stock-raising. But this is 
the whole advantage our farmers gain from our great meat pro- 
duction. Nothing more. They cannot sell their corn, which has 
been fed, nor count both as profit after one has been expended on 
the other. All the extra profit which can be considered is that 
derived from stock fed by grazing, which is not counted in the 
enumeration of annual produce, and I believe butter and cheese 
production fully compensates for that, and the annual increase 
and betterment of stocks. 

This latter item, however, would be more than covered by 
$200,000,000. Farm produce consumed at home and other small 
crops, perhaps overlooked in the census estimate, might be taken 
at $300,000,000, to my mind a liberal estimate, which $500,000,000, 
added to the $2,200,000,000 of the Census Bureau, would be the 
total possible extent to which we could stretch the figures of the 
value of our farming products. From our examination of the 
valuation, etc.* we should judge the estimate of the Census Bureau 



lOI 

not to be much below the mark ; but not to appear over-sceptical, 

I will allow for agriculture 

$2,700,000,000 
To this we must add : 

(2) The annual product of meat and wool produced on ranches 

and the product of fisheries ...... 80,000,000 

(3) Mining production ........ 200,000,000 

(4) Product of forestry . . . . ' . . . . 400,000,000 

(5) Gas a7td petroleum pi'oduction ...... 40,000,000 

(6) Manufacturing ........ 2,000,000,000 

Which gives a grand total of . . . . . . $5,420,000,000 

Manufactures are usually taken from the census reports as 
representing $5,300,000,000. But we have here a recapitulation 
of the cost of materials over and over again, and an addition of 
the same items frequently three and four times, and call it national 
production. I hold that the whole material cost has to be de- 
ducted from the account to the extent of $3,396,823,549, leaving 
about $2,000,000,000 to represent the cost of manufacture. This 
includes the labor cost, profit, rent of buildings, freight charges to 
and from the mill, superintendence, interest on loans, and all the 
incidental charges on manufactures. The cumulative nature of 
these enumerations may be illustrated by a few examples : 

First Example. — Ready-made Clothing. 

Material counted (i) in clothing. 
" (2) in cloth. 
" (3) as wool or cotton. 

Second Example. — Machinery. 

Material counted (i) in machine. 

" (2) in bar iron or steel. 
" " (3) in pig-iron. 

" " (4) as ore or coal. 

Third Example. — Crackers, 

Material counted (i) in crackers. 
(2) in flour. 
" " (3) as corn. 



102 



Proof of Multiplication. — First Example. 



Coat . 
Material = cloth 

Material = wool 



Census product 

represented by 

sales price. 



$5 
3 



Material. 



Labor. Expenses and 

I profit. 



$1 



+ 



+ 



= $5 



Now, for a thing whose final market price charged by the pro- 
ducer is $5, the census enumerates $9 worth of products by this 
system of progressive arithmetic. The only legitimate material 
cost is the last item, wool or cotton, and the labor and other ex- 
pense attending each stage of manufacture, as will be seen from 
the above arithmetical proof of a correct price compilation. The 
wool and cotton item has been counted once before under the 
heading of agriculture. It ought not to reappear under manufac- 
ture. It stands, then, that only columns three and four are legiti- 
mate counters in the aggregation of values by manufacturing 
industries. 

Second Example. 



Machine 

Bar iron and steel 

Pig-iron 

Ore and coal 



Census 
product. 



$7 

5 
3 



Material. 



Labor. 



ExptMisos and 
protit. 



$16 



Here our product in the census grows up to 16 by means of 
cumulation, while in reality it is sold by the manufacturer for $7. 
Ore and coal, and labor of manufacture, constitute the only 
legitimate price elements. Ore and coal, having been counted 
under the heading of mining, ought to be taken out entirely. 
Nothing remains then but $6 to represent manufacturing in an 
item which is now counted as %\(i in our manufacturing industries. 

I need not go into details about my third example. Everybody 



I03 

ought to know that in flouring grain is the main item, and, adding 
a very slight advance for labor and profit, constitutes the cost of 
flour. Yet our census counts up $505,000,000 as flouring, giving 
$64,000,000 as the addition to $441,000,000 of material or grain, 
all of which has been counted in agriculture. 

I have pursued the same analysis in the other items, from 
which I have deducted all materials, which were contributed by 
manufacturing industries, where they had been enumerated before. 

To this annual product of $5,420,000,000 ought to be added 
transportation expense. But as this is usually paid by the re- 
ceiver and charged upon his goods in the gross profits which he 
gets from his customers, it would be a multiplication, if I added 
them here. A great part of the annual product passes from the 
producer directly through the hands of the retail merchant into 
the hands of the consumer. But the jobber has also a large share 
in the distribution of products. If I allow, therefore, two mediums, 
the jobber and the retailer, to handle the whole annual product, as 
middlemen between producer and consumer, I believe, I shall 
more than cover all possible distributive expense laid on the 
product. As we have already the producer's profit in all of the 
above items and a great share of other charges, such as transporta- 
tion, etc., in the item of manufacture, it will be seen that we 
shall have three profit charges, which is probably all the surcharge 
which can properly be assumed as constituting the distributive 
value. The jobber's average profit at 15 per cent, and the re- 
tailer's average gross profit at 20 per cent.,Vill probably be ad- 
mitted to cover the total of the possible cost of distribution from 
the producer to the consumer. 

We will then have a product of ..... . $5,420,000,000 

Wholesale profit 15 per cent. ...... 813,000,000 

Retailers' "20 " . . . . . . . 1,247,000,000 

Add for labor of buildings, dwellings, railroads, etc. . . 200,000,000 

And we have ........ $7,680,000,000 

as the final value of our annual production, paid by the consumer. 
From this gross product draw their sustenance, according to the 
census, in round numbers, 17,000,000 persons engaged in useful 
occupations. Dividing 17 into 7,680 we have $452 as the share 
of each worker male or female, if each one had an equal share, 



I04 

taken from the values of the census year, a year of high prices and 
full employment. As there are 5,000,000 engaged in ministerial 
work, professional and other services, deriving their incomes from 
the 12,000,000 engaged in price-making occupations, the unit 
would be 7.680 divided by 12, or $640. Incomes, however, are 
very unevenly distributed. 

Let us examine the various groups who divide this income. 

Group i. — Agriculture. 

Agriculture employs 3,320,000 laborers, to whom, with their fami- 
lies (each group represents three eaters, of whom only one can be 
counted as an earner, according to the above census figure), we 
allot $250 per annum. The average monthly money wages I 
count as $12, or J144 per annum, and for rations, or board, etc. 
$106, making a total of $250. 

Multiplied by 3,320,000 this gives us ..... $830,000,000 
Farmers, gardeners, etc., 4,350.000 at $450 .... 1,957,000,000 



Or $2,787,000,000 

which would about consume the total representing the farm value 
of agricultural products, including ranch meat and fisheries. 
The farmer has to pay out of this share his township and local 
taxes, as well as the improvements on his farms, and having be- 
sides a larger family than his hired help, to support (the latter 
mostly being unmarried), it must be seen from this, that the 
majority of farmers are not in much better condition than the 
farm laborer. The greater incomes of better situated farmers 
necessarily reduce the share of the smaller farmers in our average. 

Group 2. — Manufacturings 

Gas, petroleum, and mining production, $2,240,000,000, em- 
ploys, as per census enumeration, 3,000,000 persons. The annual 
income of each is, according to the census, about $350, represent- 
ing a total of $1,050,000,000 with about 250,000 establishments to 
share in $1,190,000,000 or $4,760 each of apparent profit. It is, 
however, well known that gross profits and real profits are so far 
apart that the latter is frequently eaten up by expenses of all sorts, 
though the former make a formidable item in the gross balance 
sheet. 



I05 



For details on this subject I refer to the report of Carroll D. 
Wright, of 1883, and his tables on profit and earnings. 2,440 
establishments were examined, and the number of minus profits, 
/. e.j loss, where a respectable gross profit is shown on the debit 
page, is remarkable, though not astonishing to men engaged in 
active business. 

Out of this gross profit a great number of earners are paid, who 
are classified in Group 3, Trade and Transportation, such as 
laborers, book-keepers, clerks, salesmen, etc., engaged by manu- 
facturers and paid out of their gross profits. 

This covers our $2,240,000,000 of Group 2. 

Forestry^ $400,000,000, I have taken from Mr. Nimmo's and 
Mr. Dodge's estimate. Very excessive indeed. The material of 
our lumbering establishments is not quite $200,000,000. Other 
products of our forests are not of sufficient value to stretch this 
sum in any possible way to the above sum. But we need not be 
too close, in consideration of the many items we have already been 
compelled to deduct from the great columns of wealth, produced 
by addition and multiplication, and we can proceed to 

Group 3. — Trade and Transportation, 

This swallows up our $2,060,000,000, which I have set down as 
the gross profit of retail and wholesale traffic. Out of this gross 
sum all the railroad charges for freight, rent, clerk-hire, etc., con- 
tained in Class 3 have to be paid. This class contains 1,810,000 
persons divided as follows : 

Draymen and railroad employes 

Porters, etc. . 

Sailors .... 

Clerks and book-keepers 

Peddlers 

Saloon-keepers 

Traders and Dealers . 460,000 

Bankers and Brokers . 33,000 



480,000 


at 


$500 a 


year 






or $ro a 


week . 


. 


= 


$240,000,000 


120,000 


at 


$500 a 


year 


= 


60,000,000 


6c, 000 




500 




=: 


30,000,000 


530,000 




600 




r= 


318,000,000 


50,000 




600 




= 


30,000,000 


70,000 




700 




= 


50,000,000 


493,000 




2,700 




= 


1,330,000,000 



1,800,000 = $2,058,000,000 

The amount left over for buildings, etc., is distributed between 
mechanics, masons, bricklayers, carpenters, builders, etc., con- 
tained in Class 3, which has 3,800,000 persons, while we have 



io6 

only 3,000,000 as directly engaged in manufacture and mining. 
Many of these, however, draw their subsistence from all the four 
groups of employments footed up in the census of occupations. 

Group 4, — Professional and Personal Service. 

4,074,238, as also of Class 3, bakers, blacksmiths, boot- and 
shoe-makers, tailors, seamstresses, dress-makers, butchers, cabinet- 
makers, carpenters, machinists, painters and varnishers, plumbers, 
etc., not engaged in manufacturing, and consequently not enumer- 
ated above in Class 2, — in all nearly 5,000,000 persons have to 
draw their earnings from the other three classes of 12,000,000 
people directly engaged in the price-making employments. To 
the support of 1,075,000 domestic servants the wealthier classes 
only contribute, while 3,000,000 to 4,000,000 of other employ- 
ments draw their support from all classes alike. Government 
employes, soldiers, teachers, and all those supported by taxation 
are, as well, deriving their incomes from the poor as from the rich. 

We cannot follow up this inquiry into all the details which it 
would be necessary to do, if it were my object to show what each 
individual's, or groups of individuals', income is from the general 
product, a task anyhow impossible, as so much of one man's in- 
come contributes to that of another. My object is to draw an 
outline of the possible national income, its distributive value, and 
to show the share each of the price-building elements — not those 
employed in turn by these, but those directly engaged — have in 
the distribution of products. Not only have they to support from 
their incomes all professionals, etc., but the taxes supporting the 
government of the nation, the State, and township, — all have to 
be paid from the gross sum stated. These taxes amount to 
^600,000,000 annually, and are therefore (being mostly indirect 
taxes laid on consumption or real estate, meaning rent) a direct 
tax on every dollar consumed. Taking the annual saving, con- 
sisting of increase in buildings, railroads, improvement in lands, 
and what is carried over from year to year in movables, beyond 
the stock of the previous year, to be $700,000,000, or 10 per cent, 
then our consumption is round $7,000,000,000, and the tax thereon 
represents a clean 8 per cent, on every dollar consumed. 

The savings not being taxed, and they fall mostly to the rich, 



I07 

it follows that the working classes, eating up most of their income, 
find it more to their interest to scrutinize their government very 
closely than the richer classes. The reverse, of course, is usually 
observed as a rule in society. But the reversion of natural con- 
ditions and philosophical truth has from time immemorial been 
one of the clever pieces of legerdemain by which the poorer 
classes have been made to carry the heaviest burdens. 

Taking the annual income of the working classes to be in 
round numbers $350 (including all incomes up to $600, in our 
tabulation), we shall find each contributing $29 — out of his $350 — ■ 
for purposes of general taxation, interest on public debts, etc. 
This is not yet taking into account the tax he has to pay on his 
subsistence of home-made articles, increased in price by virtue of 
our protective tariff, such as woollen goods and iron, and which 
we may, at times of low prices, set down as $20 for each bread- 
earner, representing always three persons. In times of high prices 
this amount is greatly enhanced. The importance to the working- 
man of a low rate of taxation and of cheap prices cannot be too 
earnestly impressed. 

Having outlined a more solid basis than we had heretofore, 
on which earnings and wealth creation can be computed, we can 
proceed now to the consideration of more detailed conditions of 
social physiology, inasmuch as I intend to show by what agencies 
the lower level of earnings, expressed now by $350, of the work- 
ing classes, is gradually made to approach the possible limit, now 
expressed in our figures of $640. The latter expresses all that is 
produced, all that is divisible, all the distributive value of produc- 
tion contributed by the price-making elements of society. 



CHAPTER XIII. 

THE WAGES QUESTION. 

Like the scarlet thread through the cordage of the British navy, 
the wages question runs through every problem of modern econ- 
omy. The essence of discussion among free-traders and protec- 
tionists is the greater amount of money earnings of the work- 
ing classes under their respective leaderships. I doubt not that, 
to-day at least, the defenders of both systems are sincere in their 
belief that their doctrine is conducive to the greater comfort, the 
higher earnings, and better living of the working classes. I doubt 
not that both are sincere in their declaration that the advance- 
ment of the working classes is the main issue in the war for the 
propagation of their idea. No other issue would be worth fight- 
ing for. No one could do successful fighting for any other cause 
than that of the elevation, the advancement, of the working 
classes. It is the tendency of the age. It is in the air we 
breathe, the thought we think ; consciously and unconsciously 
every thing tends towards this goal. Unconsciously, individually 
and collectively, we are all working in this age of reason and 
machinery toward this one great humanitarian aim : the liberation 
from misery and want, the creation of a new civilization, where 
the enjoyment of the comforts of life, the intellectual blessings of 
genius, all the great gifts of nature, will come within the reach of 
the poor disinherited, who have vainly striven for thousands and 
thousands of years. I know that in this I am greatly at variance 
with most of our " friends of the laboring man," and I shall take 
great pains to prove my position by an array of facts, which will 
be recognized as conclusive, in establishing : 

That the results of modern development in the industrial world 
have been : 

1. An increasing productiveness of labor. 

2. A reduction of the proportion which labor bears to material 
in the price of any given product. 

108 



I09 

3- To cheapen thereby the cost of the product, and conse- 
quently to increase its accessibility to the masses. 

4. To increase largely the money earnings of the working 
classes ; and 

5. To reduce the hours of labor. 

All these postulates have developed in a progressing ratio during 
the last hundred years, and if we have lost sight of these facts or 
were led to a contrary belief, it is only to be ascribed to this, that 
most investigators are satisfied in reviewing a period of brief dura- 
tion. Ten, often five years, suffice to build theories upon, which 
would not stand for a moment were the period of observation of a 
wider range. We live in our generation, but mankind lives on. 
But even the life of a generation is marked by economic waves of 
longer or shorter range, of greater or smaller undulation. It 
would lead to wrong impressions were we to judge of a whole 
nation's life and welfare simply from the narrow view which the 
low descending wave permits to the observer, himself wrapped in 
its declining sweep. We have to take a broader view and find 
out whether we have not gradually advanced, even when we be- 
lieved we had declined, 

I. — INCREASING PRODUCTIVENESS OF LABOR. 

To what extent the productiveness of labor can be improved, if 
supported by rational and scientific methods, can best be illus- 
trated by a brief glance at the development of agriculture in 
modern times. Agriculture being the most rudimentary of all 
industries, has of course always been singled out for the full dis- 
play of " natural laws." No " law " has ever been such a godsend 
to the theorizing mind as the Malthusian law. It is the most 
perfect lullaby wherewith to sing to sleep the discontent of the 
poor disinherited agricultural laborer of England — in fact, the 
laborers of all countries. The population having the tendency to 
increase in geometrical proportion, while the products of the land, 
the land being limited, increases only in an arithmetical progres- 
sion, of course there is always a pressure of population upon sub- 
sistence. Nothing could be plainer than this. This being a law 
of nature, the next law of nature to evolve from this is preordained 
poverty and want. This is equally plain. No contradiction is 



1 lO 



possible. No use trying to fight and rebel against a law of 
nature. 

It would be stale to point out that, under the free play of inter- 
communication with all countries lying inside the most extended 
peripheric lines from a given centre, this law of nature could not 
show its force until all arable soils of the world had come under 
its sway. But I wish to point out the most important disturbance 
which this " law " has to undergo from the increasing productive- 
ness of the soil itself of the land to which this "law" was intended 
to apply. Thorold Rogers, by his very searching investigation^ 
has been enabled to show that in the fourteenth century eight 
bushels was the common average crop of an acre of wheat, from 
two bushels of seed-corn. This scanty supply necessitated that 
the sparse population, of two and one half millions, brought all the 
arable land under cultivation, " Lands now retain unmistakable 
traces of ancient agriculture, which have not borne grain crops in 
the memory of man. The exigencies of mediaeval society left 
little ground which could be available for cultivation for park and 
pleasure " (" History of Agriculture and Prices in the Fourteenth 
Century"). This continued to be the case nearly up to the be- 
ginning of the eighteenth century. Then, under the introduction 
of rotating crops, new vegetables, root crops, etc., and a better 
system of husbandry, the proceeds of national husbandry rose to 
such an extent that at Edward Young's time the population of 
7,500,000 had enough and to spare for export. The product of 
an acre of wheat had risen to twenty bushels. Now, within one 
hundred years from the time of this great traveller and writer on 
agriculture, the proceeds of an acre of wheat are nearly thirty 
bushels — 29.85 for England and Wales in 1884 ; from the same 
soil more than twice as large a population finds a more bountiful 
subsistence than one hundred years ago. 



1884. 


England and Wales. United Kingdom. 
Home production. Importation. 
Cwts. of 112 lbs. Cwts. of 112 lbs. 


Cereals, beans, peas, etc. . 

Potatoes ...... 


112 million. 
56 " 


128 million. 
2i " 




168 " 


i3oi " 



Ill 



A population of 27,000,000 has to feed on this supply, foreign 
and home-grown. The imports are for the United Kingdom of 
Great Britain and Ireland, and whatever is imported for the con- 
sumption of Scotland and Ireland has, therefore, to be deducted 
from the above total of importations. Vegetables and kitchen- 
gardening are not included, and it will, therefore, be seen that it 
is an easy estimate to say that fully 16,000,000 could be supported 
on the soil of England to-day against not 8,000,000 one hundred 
years ago, and 2,500,000 five hundred years ago. I have little 
doubt that under a thorough reform of the land laws of Great 
Britain and Ireland, and a granting of home rule to the latter 
kingdom, the United Kingdom could to-day largely increase its 
productiveness, and could obtain by far the greatest part of its 
subsistence from its own soil, not speaking of the unknown quan- 
tity of increasing productiveness. 

Nor are we confined to English agricultural history alone in 
this proof. France offers the same example. 

Under Henry IV., in the beginning of the seventeenth century, 
France contained about 12,000,000 of inhabitants. The average 
yield per hectare was eight hectolitres, or a little over nine bushels, 
to the acre, including seed-corn. In the beginning of the eigh- 
teenth century, in the latter days of '^ le Roi Soleil," Louis XIV., 
France had a population of 19,000,000, and Moreau des Jonnes 
("Etat Economique et Social de la France," 1589 to 17 15), in re- 
viewing the figures of Vauban's tables, proves that the production 
of cereals per hectare had not increased at all within one hundred 
years. The average proceeds were nine bushels to the acre. 
Nearly every third year was a year of scarcity and suffering. It 
is calculated that in the seventy-five years of the Sun King's time 
there were twenty-eight years of scarcity and famine. The misery 
of the people was extreme. Myriads of beggars and starving 
people, driven from their homes by the merciless tax-gatherer, 
were wandering through the lands. At the present time the 
average product per acre of wheat is i^^ bushels, or about 66f 
per cent, in excess of the period mentioned above. Her popula- 
tion is 38,000,000, or just double what it was in Vauban's time. 
Her cereal production of all kinds in 1700 was 93,000,000 hecto- 
litres or 263,000,000 bushels ; in 1880 it was 284,000,000 hecto- 



112 

litres or 804,000,000 bushels (not counting at all her dairying, 
vegetable culture, and kitchen-gardening, wine-growing, etc., in 
which her average exports amount to more in value than her 
average imports in grain), against an import of grain and flour 
averaging for the ten years from 187 1 to 1880 50,000,000 bushels 
a year. It will be seen from this that if France concentrated all 
her agricultural energies on the food supply of her own people, 
she could support with ease fully twice as many people, upon a 
reduced territory, as she found hard work to keep above the 
starvation point one hundred and fifty years ago. 

If we divide her production per capita, then in 1700 her 19,000,- 
000 had TSyf bushels of grain each, while in 1880 the share of 
each of her 38,000,000 of inhabitants was 211^9- bushels. 

From all of which it would appear that it is not well to be bound 
to a theory or a so-called natural law. It is better to look to facts 
than to remain closed up in our rent theories and wage-fund laws, 
etc. For while Dame Theory is knitting her strait-jackets and 
leading-strings, new-grown facts are springing up all around her, 
and in the vigorous exercise of their youthful powers are apt to 
destroy the most carefully guarded flower-beds of the old lady. 

Another law, boldly taken hold of by writers who are very out- 
spoken in their condemnation of tlie Malthusian theory, is that of 

DIMINISHING RETURNS. 

Closely examined, the two look so much alike that they 
might be taken as twin brothers. Of course if man were to 
be considered in the same light as a yoke of working oxen, or a 
hand turning the sod with a stick, as our remote ancestors 
have done, we would be justified in speaking of diminishing 
returns. If the soil is left to itself and its own recuperative 
power, if it is treated with the careless indifference in which our 
Western wheat-growers extract all that is in the soil, without 
thinking of returning what is taken from it, to keep up or increase 
its fecundity, then of course we may speak of diminishing returns. 
Man, however, is a wonderful being. When hard pressed by 
necessity, and left free to exercise his faculties^ little doubt needs be 
entertained, that he will even turn the niggardliness of nature into 
a prize from the lottery of life. 



113 

How true this is can be seen from the example of Holland. 
There we have a soil almost conquered from the sands of an ever- 
aggressive sea by incessant toil and watchfulness of man. The 
soil has been worked from generation to generation with a loving 
care, which can only be understood by those who have been 
reared among the small farmers of Europe, the tillers and owners 
of their land. Now this little stretch of land, cultivated since 
times immemorial, of the extent of the State of Massachusetts, 
raises food enough for a population of four millions of people and 
has enough to spare for export. Her net imports, in agricultural 
produce, consist of cereals to the amount of 50,000,000 florins, 
against exports of 75,000,000 florins in garden and dairy produce 
animals, etc., as in 1880. True, if she had to raise all her bread- 
crops on her own soil, she might not do quite so well. But by a 
free exchange of her surplus in such produce in which she has 
acquired certain facilities, against the produce of more juvenile 
soils, requiring less labor and outlay, the whole population is sup- 
plied with food over and above their needs. If the intensity of 
farming, ruling in the Low Countries, made possible by peasant 
ownership alone, were applied to the far more fertile soils of 
England, Wales, and Ireland, not speaking at all of Scotland, then 
a population of 28 to 30 millions could be easily supplied from 
her own fields and gardens, while now nearly one half of her 
needs has to be brought from abroad. The same system of farming, 
adopted in the United States, would feed 1,000 millions. We do 
not hear that the Dutch have no moving room. We do not hear 
as much of over-population, as in far less densely settled countries. 
We do not hear very much of poor-rates and agricultural paupers, 
but quite on the contrary of wealth and comfort. Emile de 
Laveleye says on this subject, in '^ Systems of Land Tenures in 
Various Countries " : 

''The farmers of Holland lead a comfortable, well-to-do, and 
cheerful life. They are well-housed and excellently clothed. 
They have china-ware and plate on their side-boards, tons of gold 
at their notaries, public securities in their safes, and in their 
stables excellent horses. Their wives are bedecked with splendid 
corals and gold. They do not work themselves to death. On the 
ice in winter, at the Kermes in summer, they enjoy themselves 
with the zest of men whose minds are free from care. 



114 

'* The Belgian farmer is neither as rich as his Dutch neighbor, 
nor can he enjoy himself in the same way. * 

" One reason is, that in Holland the townspeople have at all 
times invested their savings in public securities, and generally left 
landed property alone, which has thus remained entirely in the 
hands of the peasants. In Belgium, on the other hand, the nobility 
have retained large landed property, and capitalists have eagerly 
bought estates. Hence a good many of the peasants have become 
mere tenants. 

" To meet with the ideal of rural life, you must look for it 
in Groningen or in Upper Bavaria." 

Per contra on farming results in Belgium under opposite condi- 
tions of tenure, we copy the following picture irom. the pen of the 
same authority : 

*' In my work on the rural economy of Belgium, I made some 
reflections on the indifferent condition of the Flemish peasants, 
from which inferences adverse to peasant proprietorship have 
been drawn. These conclusions are erroneous. The evil arises 
from the fact that there are too few small proprietors and too 
many small tenants among the peasantry of Flanders. 

" If you want to find a district in Belgium where the peasants 
are well-off, you must go to Lower Luxembourg. There the land 
is divided into a multitude of peasant properties, almost the whole 
of which are cultivated by the owners themselves. Each of these 
manages his own farm, and under the shadow of his fruit-trees en- 
joys in security what he earns by the sweat of his brow. This is 
a kind of rural opulence, due not to the possession of large capi- 
tal, but to the abundance of rural produce. No one is rich 
enough to live in, idleness ; none so poor as to suffer from want. 
The peasant there is also more enlightened than in Flanders, and 
more independent. The situation is nearly the same as that of 
the Canton of Grisons in Switzerland. 

" A few figures will indicate the contrast between Flanders and 
Luxembourg ; in each of the two provinces I shall select a normal 
district. 

** Flanders. — District of St. Nicholas, in the Pays de Waes. 

" Farm laborer's wages, i franc lo centimes per day. 

" Area of land worked \ ^^ 7"^?' ^'jf ^^^Jf «=• 

( by tenants, 31,089 



115 



" Luxembourg. — Bouillon and Paliseal district. Farm laborer's 
wages, 2 francs per day. 

" Area of land worked \ ^^ owners, 10,699 hectares. 
Area ot land workea | ^^ tenants, 1,563 

'* Thus, in lower Luxembourg, the laborer's wages are double 
what they are in Flanders, although most articles of food, es- 
pecially meat and potatoes, are cheaper in the former province." 

But not only are farm laborer's wages influenced by the tenure 
of land, but all other wages seem to be higher or lower, according 
to the predominance of peasant proprietorship on the one hand, 
or tenant farming and the prevalence of large estates on the other 
hand. The German census figures recently published bring a 
tabulation of German landholdings in the different states and 
provinces of the empire. If we compare this with the general average 
of wages ruling in the same parts, as prepared with great care by 
the Statistical Society, Concordia, we can see at once that there is 
substantial proof for this assertion. Not to weary the reader with 
a great display of figures, I shall only express the percentage 
which large holdings, comprising 100 hectares or 247 acres and 
above, bear to the general acreage of farming land, the number 
of such holdings, and the general average of weekly wages : 

TABLE OF LARGE LANDHOLDINGS IN GERMANY AND OF WEEKLY 

WAGE-RATES. 











Average rate 


States and provinces 


No. of holders 


Average hold- 
ings of each 


Percentage of 
large hold'gs 


of weekly 
wages of 
working men 
employed in 
trades and 


of the empire. 


of 100 hect's 
and above. 


of this class 
in hectares. 


to the v^rhole 
acreage. 










factories. 


Silesia 


2,880 


349 


34-5 


'$2.32 


East-Prussia . 


3,199 


292 


38.6 


2.85 


Posen 


2,724 


400 


55-3 


2.90 


Pomerania . . . 


2,876 


390 


57-4 


2.68 


Brandenburg . . 


2,202 


370 


36.3 


2.90 


Saxony, kingdom . 


758 


184 


14. 1 


2.74 


Anhalt 


174 


305 


35.0 


2. 98 


Saxony, Prussia . . 


1,573 


292 


27.0 


3.04 


Hesse-Nassau . . 


287 


170 


6.7 


3-15 


Braunschweig . . 


165 


242 


17.9 


3.28 


Bavaria .... 


594 


163 


2.3 


3.22 


Hanover .... 


623 


187 


6.9 


3.20 


Baden 


83 


160 


1.8 


3.38 


Alsace, Lorraine 


394 


146 


7.3 


3.62 


Wurtemberg . . . 


141 


161 


2.0 


3.60 


Westphalia . . . 


276 


177 


4-8 


3.65 


Rhenish Prussia 


246 


146 


2.7 


3.70 



ii6 

2. REDUCTION OF THE PROPORTION OF LABOR TO MATERIAL II» 

THE PRODUCT. 

The great quantities of products of all kinds vainly seeking a 
market after brief periods of great, and, as it seems, normal 
activity, which phenomenon is commonly called over-production, 
shows that the forces which direct the distribution of products and 
wealth have not kept pace with the development of the produc- 
tive power of civilized labor, helped by modern invention. This 
alone would be sufficient to show that labor is far more produc- 
tive than ever before ; in other words, that it requires less labor 
than ever before to turn a given material into a given product ; or 
that the labor part in a given fabric has been a decreasing one. 
But as this proof may smack somewhat of the theorizing method, 
I will prove its correctness by historical facts. 

No government has been so industrious, under all sorts of 
regimes, as the French in appointing commissions and reporting 
on French labor and production. The woollen industry in France 
received great animation through Colbert's care and attention. 
As a manufacturing industry it received a new start through the 
Minister in 1648. In 1669 he instituted an inquiry through the 
governors of provinces into the state of these industries. The 
report on the woollen industry shows that there were 60,440 
workmen employed in the annual production of 670,540 pieces of 
cloth at 20 metres or 22 yards, valued at 3 francs the metre, or 60 
a piece, equal to 40,000,000 francs, or 650 francs the annual 
product of each workingman. As the price of material and the 
profit of the master are included in this annual product per hand, 
the estimate based thereon is certaialy very moderate, of : 

Material 40 per cent, and labor 60 per cent. This is allowing 25 

per cent, for profit and expenses . . . . . .150 francs 

I franc a day, or 19 cents, for wages of 300 days .... 300 " 

Certainly a moderate rate, if we consider that the workingman had 
to be kept and fed out of this sum, including his family, if he 
had any, which leaves for raw material ..... 200 " 

650 " 

In 1 81 2 the production had increased to 370,000,000, whereof 
160,000,000 was raw material, and 210,000,000 labor and profit 
and expenses, about half and half, which, giving only the material 



117 

cost and wages, brings the proportion to : Material, 57 per cent, 
and labor 43 per cent. 

In 1850 Moreau de Jonnes, in an inquiry on the state of the 
French industries undertaken under his supervision, reports the 
following proportions in the woollen industries of that date : 

Total production 413,000,000 fr. 

Raw material . . , 252,000,000 fr. 

Labor and profit, etc 163,000,000 fr. 

of which latter item 51 per cent, goes to labor and 49 per cent, 
to profit and expense, which makes our count come for 1850 : 
Material, 75 per cent. ; labor, 25 per cent. 

The commission appointed by the Corps Legislatif of France 
in 1872 made its report through M. N. Ducarre, one of its 
members, and found about the same proportion of material and 
labor cost as was found by M. Moreau de Jonnes in 1850. 

In 1869 and 1870, from a report of Consul Walker from state- 
ments made to the Chamber of Commerce, at Elboeuf, two mills, 
one making fancy and the other plain woollen cloth, had about 
this proportion : Material, $203,000, or 68 per cent. ; labor, 
$96,000, or 32 per cent. 

But as Elboeuf makes fine woollen goods which require a 
greater share of labor, this percentage will represent the highest 
proportionate cost of labor in the woollen industries in France, 
which proportion would be largely reduced if the other branches, 
representing a lower labor cost in the production, would be 
brought in to bear their ratio. 

The earnings of the working classes have been increased in 
French woollen industries in the same ratio that the labor cost 
has been reduced. I shall show hereafter the facts upon which 
this statement is based. 

Our own woollen manufacture cannot be used to serve as an ex- 
ample, on account of the very violent fluctuations in the material 
price caused by tariff legislation, currency fluctuations, and other 
means of wealth-creating by statute. We may incidentally refer to 
our woollen industry in i860, when we came nearest to a free raw 
material basis. Then our material cost was $39,000,000, and labor 
counted $10,000,000, or in percentages 79J to 2o| — a lower labor 
cost than in any other country, which, however, may be partially 



ii8 

ascribed to a cheaper class of goods being the bulk of our produc- 
tion, and which require less labor. 

In 1880 our wool prices were so much inflated by the " boom," 
that I should do little justice to this inquiry by reviewing figures 
of that year. 

In cotton goods we are far more competent to judge, by compar- 
ing i860 to 1880, the price of cotton being about the same at both 
periods. 



Materials 

Labor . . . . 

Proportion material and labor 



$52,000,000 
22,000,000 
70 X 30 



PI13, 000,000 
45,000,000 

72 1x27 f 



All this is the direct labor cost only, and does not cover any 
general or other mill-expense account. 

Taking our manufacturing production as a whole for each census 
year of the last four decades, the positions are as follows : 



Millions $ 
Material. 



Millions 
Labor. 



Proportion of 
material to labor. 



1850 
i860 
1870 
1880 



554 
1,030 
2,488 
3,396 



236 

379 

775 
948 



70 X 30 
74f X25I 
76i X 23f 
78 X 22 



We have here a regularly progressing reduction in labor cost 
and increasing quantity produced by labor. 

Mr. Edward Atkinson, in a recent publication of a very ingen- 
iously constructed chart, gives a very clear presentation of decreas- 
ing cost, of increasing earnings, and of decreasing hours, and of 
declining rate of profit in the cotton industries. Taking standard 
cotton-sheeting for his illustration, he shows that the production 
per hand was, in a particular mill : 



In 1840 . 
" 1880 . 
and in 1883 to 1885 



9,600 yds. 
28,032 " 
29,604 " 



119 

and in money value : 

In 1840 $868 

" 1883 1,973 

and in 1885 1,924 



In 1840. 



Were spindles used 
And hands employed 
Or spindles per hand 



12,500 

530 

24 



30,824 
527 

58 



35.720 

579 
62 



I may perhaps here recall a statement made in a previous chap- 
ter, that Germany's productiveness in the cotton industry is given 
as 2,700 spindles per 100 hands, or 27 per hand, and occupying 
therefore the position now, which was the standard of the New 
England mill more than forty years ago. 

That increasing productiveness, meaning greater production, 
/. <?., more product to go around, consequently greater accessi- 
bility, in other words, cheapness, has been the result of modern 
civilized labor, cannot be disputed. That the labor part in any 
given product has been a decreasing one has been demonstrated, 
and cannot be a matter of further controversy. The proof that 
the United States have made greatest progress in this direction 
has been the subject-matter of these pages. 

3. — THE CHEAPENING OF THE PRODUCT 

has gone hand in hand with the decreasing labor part. The main 
causes leading to this have been pointed out in Chapter XI. I 
will give here a few additional examples of facts. A given 
product, alike in nature and quality at the different periods, is 
best to serve as a leading example. 

Mr. Atkinson s figures of a certain brand of sheeting : 

1840. 1883. 1883-1885. 

Price per yard . . cents. 9.04 7.04 6.5 

A decline of 28 per cent, within forty-five years in an article 
which, at both ends of the period, was manufactured by the same 
processes of mill labor. 

For England I have no data at present. Leone Levi's recently 
published difference of price of cotton cloth in 1869 to 1883 is in- 



I20 

admissible for comparison, as raw cotton in 1869 was 12.33^. in 
Liverpool, against 5.60^. in 1883. 

While prices of pig-iron in England were ranging in times of 
peace a hundred years ago from ^^5 tO;^8 a ton ($24 to $38.50), 
and kept within this circle down to the time of 1836, the present 
price is ranging from 335-. to 555-., or $8 to $12.50 a ton. 

English pig-lead, which ruled a hundred years ago down to 1836 
at;!^2o to;£^2 2 (I always exclude periods of war), taken from 
price quotations in Tooke's " History of Prices," is ruling now at 
;^ii.5. 

British bar-iron, 1845 to 1850, ;£8, is 1885, ;£"6. 

In all these annotations I take pains to compare periods of like 
undisturbed conditions, where only regular influences were acting 
as price builders. The tendency has been right through to reduce 
prices by the play of mental forces, which nowhere were under 
fuller activity than in the United States, and nowhere were greater 
results achieved in reducing the labor cost and cheapening pro- 
duction, as shown in cottons and other fields of production, and 
illustrated heretofore by facts and comparisons. 

4. — INCREASING EARNINGS OF THE WORKING CLASSES. 

It is a common impression that all this great wealth-creating 
development has benefited only capital, or rather the holder of 
capital, and that the poor are getting but a small share. That the 
rich are getting richer, and the poor poorer, is repeated daily by 
unthinking minds. " Progress and poverty " has been stated 
only lately as being the Cain's brand upon the brow of our age. 
That we are far from having reached a satisfactory condition of 
society, that toil is not sufficiently remunerated, that speculation 
and monopolizing tendencies find too easy play and arrogate too 
much of the national product, through legislative connivance, I 
am too well aware. I have too frequently pointed to these 
anomalies, that I need to fear to be considered a panegyrist of our 
present condition. That, however, our age is the best in which 
man ever lived, is a matter beyond doubt. Of course I speak of 
Western civilization only, and, especially in this connection, 
of America, 

The fact alone of the great productiveness of our age, the great 



121 



Stores of grains, of dry goods, of all the many means of comfort 
which have to be consumed by the millions, which have to find a 
market among the working classes, if they are to be of use at all^ 
is alone an unfailing sign of the great advantages which the work- 
ing classes derive from the great abundance of commodities, which 
is the result of our recent development. 

If there was ever an age worth living in, it is the present one. 
If there was ever an age in which a solid footing iox progress from 
poverty was given, it is the present age. If there was ever a 
country in which the conditions are prepared for the highest 
attainable well-being of the working classes, it is America. The 
means are a thand, but it depends on the working classes to use 
them in the right direction. That this end cannot be reached by 
any systematized, ready-made doctrine, is too plain to those who 
have studied the development of the social organism. To those 
the latter is a living body. Its ills cannot be treated with Ready- 
Relief Pills. It is a sound organism, and a wise physician trusts 
more to the recuperative powers of the body, and to the removal 
from and of dangerous influences, than to drugging, cupping, or 
bleeding. 

I am far from being an advocate of capitalism, pure and 
simple, or a great admirer of the Manchester school. If any 
reforms are to be undertaken in our body politic, however, they 
must before all be based upon a clear, unalloyed statement of 
facts, and I mean to give facts. I am not a believer in violent 
measures of relief. I believe that the quiet undercurrent in a free 
social organism is constantly moving in an upward direction. All 
that society or its representative, the State, has to do, is to remove ob- 
stacles placed in the way of free development of natural forces, and 
to guard the rights of the individual from aggression or spoliation. 

Now, it is an undeniable fact that capital, unless invested in 
land or in very carefully selected securities, again based on land, 
is of a very fleeting, uncertain nature. An absolute creation of 
labor, as thought is a creation of the brain, its existence would 
cease inside of an average of two to three years if labor would 
cease in the work of its reproduction. This is, however, incon- 
ceivable as the stoppage of digestion in a healthy organism. 
Capital wastes away much more quickly than it is created, as soon 



122 



as labor is thrown out of full employment. This absolute result 
of non-activity is the secret, unconscious spring which moves 
capital to seek investment of some kind. This seeking of invest- 
ment is nothing but an attempt to find some kind of labor which 
will be able to reproduce the capital, or, as people are in the habit 
of calling it, the money, put into. any kind of an enterprise. Rail- 
road-building, mill-building, wholesale killing (as we may call the 
government business of war-making, for whose payment govern- 
ment securities are issued) — all are enterprises of this kind, wherein 
capital finds a grave when they are found to have been unsuccess- 
ful. Labor, however, is employed to the full extent of the invest- 
ment, or, to speak in homely terms, as long as the money lasts. 
If the machinery created is a full necessity, then reproduction of 
capital will go on ; otherwise it will be considered a thing that 
was, and is no more. The more abundant capital, the smaller the 
share of profit, or interest, or dividend, whatever it may be called. 
This again proves the great competition of capital for labor which 
is constantly going on, unconsciously of course, and perhaps not 
recognized by these terms, but this is the true meaning. When 
work is abundant, then profits are high. Great activity at repro- 
duction of capital. Then capital, perhaps, gets an undue share. 
But when the current moves backward, then vce victis. Then we 
hear of our mining shares. Northern Pacific and West Shore 
bonds, Washington woollen mills, and all the stocks of iron and 
steel mills, etc.; then all these schemes tell the story of greed 
working its own destruction, or of labor being put into enterprise 
which did not pay. But even in paying, honest, well-organized 
enterprises, in the best-managed cotton-mills of the country, the 
tendency of the capital share in the process of production has 
been a progressively declining one through the large competition 
of capital for investment or labor. The proportion of the yard 
price in 1840 requisite in paying for a profit of 10 per cent, on 
fixed capital of a cotton mill, manufacturing standard sheeting was 

1. 18 cents, 

or of the yard price . . . • T3 per cent. 

In 1883 — 10 per cent, was . . . 0.43 " 

or of the yard price . . . .6 " 

In 1885 — 6 per cent, was . . . 0.25 " 

or of the yard price . . . .4 " 
per yard of the same sheeting. 



123 

In the cotton industries of England the same results of decreas- 
ing capital earnings are observable. I refer here to a financial 
statement of sixty-five cotton-spinning establishments of Oldham, 
in the London Economist of May i6th of this year. They make a 
showing of an average of 4 per cent, of annual net earnings, 
against 6 per cent, in 1883. 

PROGRESSIVE RISE IN FRANCE AND ENGLAND. 

For the establishment of the fact of progression of earnings, I 
will briefly review France, England, and the United States. John 
Locke ("Journal of Travels in France") in 1677 estimated the 
income of a French peasant at eight cents a day, hardly enough 
to keep himself and family in bread. Moreau des Jonnes finds 
this estimate high, as it applies to one of the best districts. Fr. 
120, or $24, for 300 working days, was, according to the calcula- 
tion of this statistician, the whole income of a peasant and wife, 
both working the farm. Corn prices were higher than to-day. 
Mme. de Maintenon, writing in 17 16, says that in Bourbonnais 
1,700 farms were abandoned. As the cause is given that the 
animals were seized by the tax-gatherers, and that there was noth- 
ing left to the poor country people to work and to cultivate the 
soil. In 1840 the income of the farmer was estimated at 32 cents 
a day, or for the year 456 francs, or over $90. In 1856 Moreau 
des Jonnes estimated the income at 562 francs, or $112. In 
manufacturing industries in 1850 the rates of pay were : for men, 
2 francs, or 38 cents ; for women, i franc, or 19 cents ; and for 
children, 12 to 14 cents. 

In 1876 the Commission of Inquiry appointed by the National 
Assembly made this statement through Mr. M. Ducarre : 

TABLE OF DAILY AVERAGE WAGES. 



1853- 




187 


[. 




Paris 




Men 


. 3.82 


fr. 


or 


72 cents. 


4.99 fr- 


or 


95 


cents. 


Women 


. 2.12 


fr. 


or 


40 cents. 


2.78 fr. 


or 


53 


cents. 


Depts. . 




Men . 


. 2.06 fr. 


or 


39 cents. 


2,90 fr. 


or 


56 


cents. 


Women 


. 1.07 


fr., 


or 


20 cents. 


1.48 fr. 


or 


28 cents. 



Maurice Block's Annuaire Statistique for 1884 gives this as the 
average of wages, according to the Mayor's report of the capital 
cities of the departments : 



124 
DAILY AVERAGE WAGES. 



1853. 


1880. 


Paris 
Depts. . 


\ Men . . 
I Women 
y Men . . 
I Women 


3.82 fr. 
2.12 fr. 

2.06 fr., 

1.07 fr.. 


or 72 cents, 
or 40 cents, 
or 39 cents. 
or 20 cents. 


5-59 fr. 
2.92 fr. 

3-35 fr. 
1.75 fr. 


or $r.o6. 
or 56 cents. 
or 63 cents. 
or 33 cents. 



which, compared to the wages rate of 1861, shows the continuity 
of a slow but permanent rise. 

It is well to say in this connection that the frequently quoted 
Government Report informs us of the otherwise well-authenticated 
fact, that wages in France rise slowly, but that they never recede 
from the height once attained. 

For England we have still more complete data of comparative 
earnings in an increasing ratio. Before establishing the rate 
of wages paid a hundred years ago, when the good old times had 
full swing, we have to look at the price of corn. To understand 
the importance of this, it is necessary to know that, according to 
Mulhall's calculations, the following percentage is taken for food 
alone, when wages are as stated below : 

RATES RULING IN" COUNTRIES.^ 



Average wages per week. 


Wages. 


Food. 


Ratio in sur- 
plus for 
other exp. 


Great Britain . . . 3ij-. or $7.43 

France 21 " 5.04 

Cicrmany l6 " 3.84 

United States . . . 48 " 11.52 


100 
100 
100 
100 


45 

57 

62 

33 


55 
43 
38 
67 



About 1795 Frederic Eden took down the average earnings of 
four agricultural families for each of twelve counties, fifty-one 
families as stated by Thorold Rogers. They are los, gd., or 
$2.58 per family, in which about two thirds may stand for the 

* It is evident that Mulhall does not sufficiently consider that high earnings 
conduce to better feeding, as well as to a greater surplus for other purposes. 
While it is certain that low earnings are first used to supply food and leave 
only a small surplus for other expenses, as in Germany, it does by no means 
follow that with increasing earnings the ratio for food should not rise in a far 
greater degree than given above. 



125 



earnings of the head of the family. Robbed of his patrimony- 
through the various enclosure acts, with corn averaging for the 
last quarter of the eighteenth century at 51^. (81 j. per quarter 
being the price in 1795), of course the poor-rates had to make up 
for the deficiency. 

The weekly wages of agricultural laborers in Northumberland 
are stated in the Report of the Royal Commission on Agriculture 
{Leoni Levi, 1885) : 







Weekly Average price of 






wages. wheat for five years. 


I85I 


• • • 


1 1 J. 56J. quar. or $1.68 bushel. 


1861 


• • • 


i6s. 6d. 48 " 1.42 


I87I 


• • • 


15 6 55 " 1.65 


I88I 


. 


18 42 " 1.25 
Present price, 32 " .96 " 


Wages rose with a 


progressive decline of wheat. 


In 1785 


: 




Carpenters' wages were 


2s. 6d., or 60 cents a day. 


Bricklayers' 


<( 


2 4 " 57 " 


Masons' 


(( 


2 10 " 68 


Plumbers' 


i ( 


3 3 " 78 



The rate of increase has been about as follows 















(Man- 














chester.) 














hours. 




178s- 


1850. 


i860. 


1870. 


1877. 


1883. 


Joiners, week .... 


$3 -60 


$5-76 


$6.72 


$7.68 


$9.26 


$8.72 


Bricklayers, week 


3-42 


6.24 


7.20 


7.68 


10.35 


9.28 


Masons, week .... 


4.08 


5.76 


6.48 


7.20 


8.90 


7.84 


Plasterers, week . 




6.24 


6.72 


7.68 


9.12 


8.72 


Laborers, week . . . 




4.07 


4-32 


4,90 


5-72 


5-40 



A hundred years ago factory labor was not a whit better paid 
than other branches, of which I gave quotations above. Taking 
1765, a year of peace and low corn prices, the weekly wages of 
weavers were from $1.70 to $2.40 and $2.88 ; for iron-workers, 
$2.40 ; and Sheffield paid $3.25. At Newcastle, colliers earned 
$3.60, and at Wakefield, $2.64. 

The average weekly wages of women in textiles were . . $1.02 
" " " boys .. «< .^ ^ ^2 

" " " girls «' '« . . .62 



126 



These rates have grown, to the present time, as follows : 





1850. 


i860. 


1870. 


1877. 


1883. 


Iron-puddlers 

Mechanics .... 
Laborers .... 
Colliers .... 


$10.80 
6.72 
4-32 
4.70 


$9.60 
7.20 

4.32 
6.18 


$9.60 
7.20 
4.80 
5.86 


$10.80 

7.44 
4.80 
6.86 


$11.52 

7-44 
4.80 
6.30 



Cotton-mills, hours of labor 56I- since 1874, before 60 hours : 





1850. 


i860. 


1870. 


1877. 


1883. 


Mule-spinners, male . 
Piecers, female . 
Rovers, female . 
Overlookers, male 
Strippers and grinders 
Minders, male 


$9.12 
1.56 
1. 81 
5.28 
2.40 

10.32 


$9.12 

1.56 
2.64 
6,00 
3.12 
8.00 


$8.64 
2.64 
3-36 
7.20 
4-32 
9.60 


$12.72 
2.64 
4.08 

8.38 

5.04 
11.80 


$9.60 
2.64 

4-32 

9.12 

5.04 

11.04 



The United States show a like progressiveness in the wage-rates 
during the period of industrial development dating from 1840, 
and of farm labor likewise. I shall leave out the years of cur- 
rency inflation, when wages were higher, but had a much smaller 
purchasing power than in i860 or 1883. 

To show this fully, I will give a statement of farming rates of 
labor compiled by Mr. David C. Voorhees, of New Jersey, for the 
Commissioner of Agriculture, for the last twenty-five years, and 
also the purchase power of wages expressed in food supply : 





Price, 


Bush. 


Rate of wages. 


Year's wages purchase. 




Corn. 


Wheat. 


Per year. 


Per day in 
harvest. 


Corn. 
Bush. 


Wheat. 
Bush. 


i860 . . 


$ .75 


$1.40 


$130 


$1.75 


173 


93 


I86I . . 


.60 


1.25 


TOO 


1.50 


167 


80 


1862 . . 


.60 


1.50 


120 


1.50 


200 


80 


1880 . . 


.50 


1. 12 


150 


1.75 


300 


134 


I88I . . 


.47 


1.35 


150 


2.50 


319 


III 


1882 . . 


.60 


1. 18 


150 


2.50 


250 


127 


1883 . . 


.50 


1. 12 


150 


2.50 


300 


134 


1884 . . 


.40 


.75 


150 


2.50 


350 


137 



127 

According to the census of 1850 farm hands in New Jersey 
received 88 cents a day without board. Carpenters' wages in New 
Jersey were $1.28 ; in the State of New York, $1.38 a day. 
The yearly average earnings in manufacturing industries for 

1850 were $247 

i860 " 290 

1880 " 347 ; 
1880, however, was a year of inflation, being the boom year. The 
greatest proportionate rise in wages is noticeable in 1850-60, when 
the purchasing power of money in the United States was higher, 
on the whole, than in 1880. It has been shown lately, through an 
extended inquiry by Bradstreefs, that a decline from the rates paid 
in 1883, the highest wage-period of recent years, had taken place, 
most pronounced in industries which have highest protective 
tariffs, such as woollens, iron, coal, etc., while such, which by their 
very essence cannot be influenced either way by tariff legislation, 
had hardly suffered any wage reduction from the highest rates of 
1883. This would show again that the natural wage-tendency of 
our industrial situation is an upward one, or, to say the least, to 
maintain the standard once obtained, which, however, if forcibly 
interfered with, as by tariff legislation, must suffer decline. But 
even this may be considered a transitory condition. That the 
general movement is an upward one, may be taken from an 
account of wages taken from the Standard Sheeting Cotton-Mills, 
from which we have quoted above, showing the increasing pro- 
ductiveness of labor, decreasing labor cost, and decreasing ex- 
pense and profit cost. The annual earnings of operatives in these 
mills, compared with 1840, are as follows : 



Year. 


If paid in sheeting. 
Yards. 


Year. 


Per hour. 
Cents. 


1840 
1883 
1884-5 . 


1,936 
4,097 
4,154 


$175.00 
287.00 
270.00 


4.49 
8.80 

8.37 



5. REDUCTION IN THE HOURS OF LABOR. 

Hand in hand with increasing earnings has gone a corresponding 
reduction in the hours of labor. It is a very reassuring fact that 



128 

the working hours are shortest to-day in countries where wages 
and productiveness are highest. While the week in England 
averages 54 to 56 hours, Germany's and France's week still 
averages 72 hours, with many industries at 78 hours. Switzerland 
has some time ago adopted a normal working day of 11 hours. 
The report of the Factory Inspectors for 1882 and 1883 finds 
much to say on the improvement the act has worked in the con- 
dition of the working people. As with all innovations of this 
kind, of course, many manufacturers express disparaging opinions, 
while a great many more make favorable comment on the results 
achieved thereby. Massachusetts has fixed 60 hours by statute 
without having experienced any incursion by competing neighbor- 
ing States, which still adhere to longer hours. It has been the 
common experience, wherever tried, that shorter hours enable 
the workman to put more energy into his work. 

In the early part of this century, in English cotton-factories the 
week extended to 74 hours ; from 1833 it was reduced to 69 hours. 
From this it went gradually to 60 hours, and in 1874 to 56^ hours, 
which may be considered the normal working time of the week in 
Great Britain, although there are trades where 50 to 52 hours is 
the rule. 

In the United States the extent of the working day in cotton- 
mills is quoted by Mr. Atkinson as having been 13 hours in 1840 ; 
this was by degrees reduced to 11 hours, and since 1883 to 10 
hours in Massachusetts, with other States beginning to move in 
the same direction, the State of Rhode Island having adopted a 
lo-hour day within a month of this writing. In speaking of the 
building trade and of the normal working day of eight hours in the 
latter part of the Middle Ages, Thorold Rogers says : " Employers 
are very likely to discover that the laborer's resistance to an ex- 
cessively long day was not entirely personal, and that the work 
might suffer from the workman's weariness and exhaustion." 
The excellence of the work, lasting through ages, when more re- 
cent constructions have disappeared entirely, is even a more 
eloquent proof of the soundness of the economic views of our 
forefathers, than the voices which are raised from the grave of 
yellow parchment. 

Germany, then at the head of Europe in commerce and manu- 



129 



facture, the economic ruler of the world, the banker and trader of 
Europe, held to the same rules during its high tide of prosperity. 
All of which shows that reasonable hours are not at all incompati- 
ble with great activity and productiveness ; nay, that they are 
a necessary condition to their achievement. 



CHAPTER XIV. 

I. THE INFLUENCE OF FREEDOM ON THE CONDITIONS OF THE 

WORKING CLASSES. 

An Historic Parallel. 

Political economy is called the dismal science. Wrongly so. 
Under theoretical and dogmatic treatment it may deserve this off- 
hand dismissal. But when placed in a truer position, that of an 
historian of the development of the social organism, then the case 
is different. When by analytical inquiry into the methods of pro- 
duction and distribution it can be shown that the result of the 
undisturbed play of social forces has been the one indicated in the 
head-lines of the five subdivisions of the preceding chapter, then 
hopefulness must take the place of pessimistic despondency. A 
science which can lay bare, by inductive investigation, the inner 
workings of correlative forces in the body politic, and can prove 
that the ascendancy of democracy has given to the poor more and 
better food, more and better clothing, and better housing, all 
coupled with lessening toil and hardship, then such a science 
ceases to be a dismal one, and assumes the proud position of a 
comforter and teacher of mankind. 

The powerful influence of these forces upon production wrought 
by a high standard of living of the working classes can best be 
shown by an historic comparison. I have often alluded to the 
small productiveness of Germany. I have shown the small earn- 
ings and poor living of most of its people. This has not always 
been so. A glance at Germany during the great Quinto Cento, 
the last century of the much-abused and misunderstood Middle 
Ages, gives us a parallel, which brings out our points in strong re- 
lief and contrast. Economically, commercially, and financially, 
Germany occupied then the position which England holds to-day. 
Without a central government which deserves the name, for over 
two centuries the German towns had to rely on their own re- 

130 



131 

sources, and on the manly, sturdy spirit of their citizens to work 
out their own salvation. Behold what great work they organized 
and shaped, unaided by any power from without, but much hin- 
dered, rather. Between the jealousies, the aspirations, and petty 
wars of the robber-barons and rising dynastic houses, the towns- 
men had to be prepared continually for bloody work. They did 
this work, when necessary, very effectively. They were a vaUant, 
manly race. They had to shape their own destinies. When hard 
pressed, no one came to their rescue. Within their walls they had 
to organize a state of their own. One by one they obtained their 
privileges and rights from the crown until they had gained full 
freedom, the right of self-government and taxation. The power 
of the towns soon overawed princes and empires. The Hansa dic- 
tated laws to all the Northern kingdoms. They made and unmade 
kings. In the North, from Brugge, Bremen, Liibeck, Hamburg, 
they carried the commerce of the world to Novgorod, to London, 
and to Bergen in Norway. The trade of England centred in their 
hands. With the principal Hansa-house in London, the Stahlhof, 
which represented their interests in a larger sense, they had their 
trading-houses and guilds in Lynn, Boston, York, Bristol, Hull, 
Ypswich, Yarmouth, Norwich, etc. 

These warrior merchants had to keep the waterways free from 
pirates and the landways from the noble passions of knightly 
brigands. In the South, Augsburg, Nuremberg, Ulm, Strasburg, 
Berne, Vienna, etc., transacted the business of exchanging the 
products of Italy and the Orient with those of Germany and the 
North. The treasures which poured into German cities are 
recorded in indelible characters to the present day in the great 
cathedrals, city halls, guild- and council-houses, and in the pal- 
aces of some of their private citizens. The wealth of the Welsers, 
the Fuggers, the Hochstetters, etc., etc., has disappeared ; the great 
pulsation of vigorous life has fagged away in the centuries of 
depression and oppression which followed in the wake of the 
Reformation and counter-reformation and their bloody wars. 

But the great epoch has left us its object-lesson, the work of its 
free citizens, in the monuments of its architecture, sculpture, 
painting, wood-carvings, armors, metal-works, all showing the 
great skill and greatness of conception of workers, masters, and 



132 

thinkers. It is hardly necessary to dive into the chronicles of that 
time for reference, when we have such witnesses before our eyes. 
The impression which German life made upon foreign travellers, 
however, is worthy of note in this connection. Pierre de Froissard, 
writing in 1497, says : 

" We are filled with admiration when we see how enterprising 
and courageous German merchants are, how they understand to 
increase their wealth. The prosperity of the cities, the beauty and 
grandeur of its public and private buildings, and the treasures in 
the interior of their houses are telling witnesses of this wealth. It 
is a great pleasure to tarry in these cities and to take part in the 
public amusements and festivities of the citizens." 

^neo Sylvio Piccolomini, later Pope Pio II., writes in 1458 : 
" We say it frankly, Germany was never richer, never more bril- 
liant than to-day. The German nation is in advance of all others 
in greatness and power, and one may truly say that there is no 
people to whom God has vouchsafed as much favor as to the 
German people. Everywhere in Germany we see cultivated 
grounds, cornfields, vineyards, flower-gardens, and orchards, in 
town and country, everywhere fine buildings, pleasant villas, 
castles upon the hills, and walled cities. . . . To speak the 
truth, no country in Europe has better and brighter-looking cities 
than Germany. Their exterior is fresh and new ; it seems, though, 
as if they had been completed but yesterday. Nowhere else does 
one find as much liberty as in German cities. The inhabitants of 
the so-called free states of Italy are, in reality, slaves, in Venice 
as well as in Florence or Siena. The citizens, with the exception 
of the few who constitute the government, are treated as slaves ; 
they can neither use their money as they seem fit nor say what 
they please, and are subject to the severest exactions. With the 
Germans, on the contrary, every thing is bright and happy ; no one 
is threatened in his possessions, every one is safe in his inheritance, 
and government injures no one except him who injures others." 

The German plebeian townsman had conquered the obstinate 
resistance of the patrician. The craft guilds played a prominent 
part in the city government. Every thing partaining to the craft 
was regulated by the guild in the guild-hall. The workmen were 
equally free and powerfully organized in trades-unions, which 



^33 

frequently extended their organizations over the whole of Ger- 
many. They carefully guarded the honor and dignity of their 
craft, and their social position was a high one and jealously guarded 
by them. In illustration, the journeymen bakers of Colmar : they 
struck work in 1495, and kept up the contest for ten years, until a 
decision was rendered by an arbitrator in their favor, and they 
were put back to their privileged rights, to march in an advance 
position in the Corpus Christi procession. 

Many cases of a like nature are recorded. We should call 
them to-day sentimental grievances. But the workingmen's in- 
sistance on rights of this nature shows that they considered them- 
selves, and were considered by common consent, equals in every 
sense of the word, and is evidence of a satisfactory material and 
pecuniary position. Sentimental grievances are not raised by 
working people when their condition in life is of a low type. 
Most disputes, however, were settled to the satisfaction of both 
parties by the guild or the town-council. Wages were high, con- 
sidering the great purchasing power of money, the low prices of 
commodities, and the fulness of board, lodging, washing, etc., all 
of which were provided in the master's house, and all regulated to 
the minutest details by agreement of the guild on the one side and 
the trade-union on the other side. The records of the day furnish 
evidence of this, which in profuseness leave nothing to desire. 
Mutuality, the leading principle of feudalism, exercised its power 
in the relations of masters and workmen, and showed the satis- 
factory conditions of the latter in the work which they performed, 
and in the great demand in which German manufactures and Ger- 
man workmen stood in foreign countries. One Felix Fabri, from 
Ulm, wrote in 1484 : " If any one desires good work done in 
metal, stone, or wood, he intrusts it to a German. I have seen 
German goldsmiths, jewellers, masons, and carriage-makers do 
wonderful things among the Saracenes ; they excelled Greeks and 
Italians in skill. The Sultan of Egypt availed himself of the 
advice, the skill, and the work of a German in the erection of the 
wall around the harbor of Alexandria, which is the admiration of 
the whole East." 

Germany's exports consisted largely of German linens, woollen 
cloths, metal-work of all kinds in gold, silver, bronze, copper, iron, 



134 

and steel, wood-work, etc., etc. Over 300,000 pieces of linen were 
bleached alone upon the bleacheries of Ulm, in Suabia, each year. 
Ulm has especial natural facilities for bleaching, which gave it 
great importance in the linen industry up to the present time. 
But its importance as a linen-manufacturing town can be measured 
from its own production of over 200,000 pieces annually at the 
period mentioned. The manufacture of woollen cloth was a great 
industry in Southern Germany and in the Rhenish provinces of 
the empire. One of the writers of the time, J. Wimpheling, in De 
Arte Impressoria^ says : 

" In many Westphalian towns loom touches loom, and it is dif- 
ficult to estimate how many hundred thousand pieces the guilds 
produce month after month. The weavers are everywhere as 
industrious as they are skilled, and stand in high esteem with 
their fellow-townsmen." 

Division of labor was practised to a large degree ; especially so 
in the finer arts and crafts ; in metals prominently so. Special 
parts of an armor were frequently made by a special group of 
workmen, which explains the skill and perfection which the pieces 
display that are still in existence. 

The woollen industry was likewise divided into many branches. 
Those who made woollens of fine Flemish and Italian fleeces were 
a different guild from those who worked the coarser home-bred 
wools. There were, besides the weavers, the wool-combers, the 
cloth-shearers, the fullers, the frame-tenders, the finishers, etc., all 
organized in separate crafts and trades. This minute subdivision 
alone explains the great efficiency and productiveness of labor of 
that great period. Even the dyeing craft was subdivided into 
black dyers,' fine dyers, madder dyers, etc. 

The standard of living of the workingmen is observable from 
the many regulations handed down to us as to the food they were 
entitled to. They seem to have been very lavish in their outlay 
for clothing, ornaments in gold and silver, etc., etc., which the 
town-councils often felt themselves called upon to repress, vainly 
though, by occasional ordinances and proclamations. It appears 
therefrom that silk and velvet were not uncommon articles of 
dress among them. The rich gifts which we find recorded as their 
offering to churches and other pious foundations speak equally 



135 

well for their favorable financial conditions. Eating and drinking 
was granted in profuse quantities. The many disputes over set- 
tlements of the mooted questions as to quantities, the various 
dishes and kinds of food that were to constitute the meals, give a 
full account of the well-living of the working classes. Meat was 
given twice a day. The workmen frequently obtained two kinds 
of meat for dinner, with at least half a quart of wine. Many 
times we find wine twice a day as their portion. One regulation 
calls " that the meat shall reach two fingers' width over both ends 
of the plate." Wine, not beer, was the common beverage, and its 
great consumption by all classes is recorded so frequently by all 
writers of the time, that this alone might be considered a proof of 
general well-being. More than all, however, the great consump- 
tion of meat stands out in solid form as an indicator of the condi- 
tion of the working classes. It is calculated that in Frankfort- 
on-Oder the consumption of meat was twelve times as large as in 
1802. 

We could give like accounts of the favorable condition in which 
the peasantry and the agricultural population at large was placed. 
We have numberless records of regulations governing the relations 
of lords and tenants, masters and servants. The latter's food and 
pay were as fully and carefully attended to as we found to be the 
case in reference to town population. Serfdom had almost entirely 
disappeared, and the sharp edges of feudalism had been smoothed 
and rounded. All in all, we find a full analogy of the facts 
brought out by Thorold Rogers regarding England. The state 
of the working classes, both agricultural and industrial, was as 
satisfactory in Germany as Rogers found it in England in his 
survey of the fourteenth and fifteenth centuries. In a recent 
publication (" Geldwerth und Arbeitslohn im Mittelalter," by 
Stephan Beissel, Freiburg, 1885) I find a history of prices, wages, 
and relations existing between master and workmen, from bills and 
records relating to the building of St. Victor at Xanten, which 
bring very satisfactory support to Professor Rogers' conclusions, 
that low prices and high earnings of the working classes go hand 
in hand. But low prices, in this connection, is only another term 
for a high rate of productiveness, which necessarily must end in 
great consumption, or what is the same, high earnings. 



136 

German students of the economic history of that age agree that 
at our time the middle classes do not keep so good a table as was 
the custom among the working people then. 

Compare this with the present diet of the German working 
classes, when meat is an almost unknown quantity upon their 
tables, except an apology of it on Sundays and holy days ; when 
potatoes, chicory coffee, and rye bread form the almost universal 
and main articles of food ; then we may well pause and ask our- 
selves whether declining productiveness does not stand in causal 
relation with a reduced standard of living. 

When we unfold these facts, then we find a full retort to the 
exclamation of Prince Bismarck, that Germany is three hundred 
years behind and cannot be compared to England or America. 
The German people are of the same stock now as then. They are 
of the same stock that made England's and America's greatness. 
But the liberty of action, the freedom of thought, which formed 
Germany's greatness in the fourteenth and fifteenth centuries, was 
suppressed by the ascendancy of absolutism and the reversal of 
the old popular law (Volksvecht) ; while England, not weak- 
ened by disastrous wars, like the great peasants' war and the thirty 
years' war, could save itself from the sad fate which overtook 
Germany's popular rights. 

2. ON GUILDS AND WORKINGMEN's ASSOCIATIONS. 

Not a quarter of a century had elapsed since the Reformation, 
when the signs of barbarization were visible all over Germany. 
The decline and decay of art, manufactures, and commerce, of 
the comfort and well-being of townsmen and peasants, followed in 
the wake of the social, religious, and political disturbances which 
agitated Germany all through the sixteenth century. The thirty 
years' war sealed Germany's doom. Territorially and economi- 
cally, it left it a waste. Politically, it made it a nonentity. It 
made an independent sovereign of every little baron, count, or 
duke. Every one of these opera-bouffe potentates was a miniature 
copy of the great Louis or his successors. They imitated all the 
vices of the French court without possessing the refinement which 
could make them otherwise than loathsome. 

The worst, however, was the fearful oppression which this half 



137 

thousand of petty despots heaped upon their subjects in the way 
of taxation and burdens. Every one of them had his custom- 
house and his army, if only of two privates, a captain, and a 
general. A retinue of court officials was a matter of course with 
each of these mignonette rulers. Always ready to make a bargain 
with foreign powers, and being more bent on selling their male 
subjects, as so many heads of cattle, for foreign battle-fields and 
keeping their harems well stocked, they certainly had no great 
solicitude for the welfare of their subjects, whom the Westphalian 
treaty had delivered into their hands. Under such circumstances 
it cannot surprise that it took fully two centuries till Germany 
had recovered from the terrible wounds the thirty years' war had 
inflicted. Under the rule of absolutism and restraint of all kinds, 
free citizenship could not exist. Despotism has never developed 
industrial and commercial greatness, but, on the contrary, has de- 
stroyed this as well as the happiness and well-being of the people, 
who had enjoyed these blessings under more favored circum- 
stances. Spain, Italy, Germany, and France under the old regime 
(not to mention the unspeakable Turk) give lasting examples. 

It is, therefore, impossible to judge the guilds and associations 
of the fourteenth and fifteenth by those of the later centuries. 
The former were the natural development of a state of society in 
which the individual had to seek shelter somewhere from the 
aggressive power of the mail-clad horsemen. The people had 
either to be the baron's men or they had to protect themselves by 
their own means against the baron. The walled bourg or town 
offered this shelter, of which the country-people availed them- 
selves with alacrity. They were welcome guests at a time when 
strong arms were the best friends a man could have. This 
gradual strengthening of city and town weakened the powers of 
the lords, and at the same time offered markets, always near, for 
the produce of the soil. In this wise a gradual pacification, 
civilization, and general raising of the conditions of all classes 
had taken place, which happy development culminated in about 
the latter half of the fifteenth century. The guilds were the re- 
sult of a strong impulse for self-preservation, as well as a necessary 
condition for the achievement of great ends in town politics as 
well as in trade, manufacture, and commerce. The results which 



138 

they brought about were in themselves the strongest proofs of the 
necessity of their existence. The workmen would have been 
powerless in the hands of their masters, had they not followed 
their example. The result also shows that their labor-associations 
w^ere well-timed, as the two centuries of mastership in manufac- 
ture and commerce amply testify. The admission into the guilds 
was easy. Workmen were employed, from wherever they came. 
The fourteenth and fifteenth centuries find workmen, masons and 
master-masons, stone-cutters, etc., from all countries engaged in 
the building of St. Victor at Xanten. So was money circulating 
freely whether coined in Germany or elsewhere. The end of the 
latter century, however, finds already every thing narrowed down 
to ''home production." All of which shows the great freedom 
that had gradually worked through the hard crust of feudalism into 
the open air, promising greatness and happiness to the people. 
It was not to be, and it was left to our own time to take up the 
great work of restoration. 

The guilds, during the succeeding centuries, were gradually de- 
caying into petrified monopolies. Their whole aim was to exclude 
new-comers from sharing in the benefits and advantages of their 
position, to prevent competition by keeping down the number of 
masters, and to prevent workingmen from asserting their rights by 
all sorts of legal devices, which the ruling powers were only too 
ready to supply. 

It cannot surprise, therefore, that the manufacturing industries 
had declined. Neither can it surprise, that Colbert could not 
think of better means of raising them again to a higher standard, 
than state-supservision, the leading remedy for all evils in a politi- 
cal status, expressed in the device : " V etat c' est moi." The 
many ordinances and laws promulgated under his administration, 
the directions given to his factory inspectors, and their reports 
show the decline of the various industries, as well as the degree 
of corruption and deceiving practices which had taken hold of 
the management and curtailed the usefulness of the guilds. 

The sequel proved that nothing short of a total abolition of all 
guilds and corporations and the grant of absolute freedom to 
trade, manufacture, and commerce could restore health and 
growth to industry and commerce. 



139 

This opinion had gained ground in the latter part of the 
eighteenth century. Long before the advent of Adam Smith's 
" Inquiry into the Nature and Causes of the Wealth of Nations," 
the Economists prepared the public mind. They had the 
opportunity of studying from life. They saw on the one hand 
the bad results of mean, gluttonous monopoly controlling produc- 
tion, and on the other hand, the equally bad results of gov- 
ernment's constant interference, regulation, and prescription. 
Indeed both tended to the same end, that of dwarfing enter- 
prise and enslaving intellect. 

That Turgot could dare to promulgate his famous and really 
great conceptions in the form of laws, shows that the public mind 
had been well saturated with principles of economic truth. 
Though not all his reform measures were carried through, though 
many were withdrawn shortly after their publication, yet they 
were to an extent carried into practice. Of course, he met with 
fierce opposition from all sides. Not his great measures, how- 
ever, but the jealousy of his ministerial rivals at court, was the 
cause of his fall and of the stinted execution of his measures. No 
one, however, gave a more earnest and honest support to Turgot 
than Louis XVI. — the best inclined and most unfortunate of all 
the kings of the house of Bourbon. 

Turgot says : " I know no other means of imparting life to 
an industry than to give it the greatest amount of freedom and 
the removal of all taxes which the misunderstood interest of the 
fiscal administration has heaped upon every kind of merchan- 
dise." This is the spirit which pervades his reform plans. 
The freeing of the corn trade, etc., etc., by the laws of 1774 to 
1776, from all restraints and taxes, is only an indication of the 
drift of his measures. 

Guilds, monopolies, and police-regulations of industries were 
removed by the great edict of February, 1776, the year in which 
Adam Smith's great work made its appearance. Blanqui calls 
this law the charter of freedom of the working classes. In a 
memorial to the king, Turgot explains his views on the subject. 
He says : That the guilds prevent the development of the indus- 
trial arts, that they oppress the lower classes, that their adminis- 
tration is a very defective one, and that they increase the price 



I40 

of commodities. He finally declares the time to be eminently- 
favorable for this measure, on account of the revolutionary war 
just breaking out in the British colonies of North America. This 
war, he says, will stop the English factories and throw, if we es- 
tablish a free industrial system, all of their workmen and trade 
into our hands. 

His solicitude for the poorer classes speaks from this sentence 
of the law : " We are in duty bound to give to all our subjects 
the fullest use of all their rights. Before all we owe this guaranty 
to that class of men who have no other property than that of their 
labor and their industry. To them the use of this right to its 
fullest extent becomes the more important, as it is the only source 
from which they can derive their maintenance." 

That his laws and regulations were partially removed in the 
succeeding years, and not even fully adopted by the Revolution, 
that guilds and repressive acts were resorted to again, is not the 
fault of Turgot. It only shows the difficult, labored, and heavy 
step in which mankind moves, even when genius has raised the 
beacon high, to illuminate the way. It does not even show that 
mankind moves slowly in the path of liberty and progress, but 
that monopoly and privilege die hard. The death-struggle still 
goes on. The weapons which freedom wields are, however, too 
destructive for old, decrepit, and time-worn institutions. The age 
of steam and electricity cannot possibly be burdened much longer 
with the rotten machinery of past centuries. 



CHAPTER XV. 

SOME ECONOMIC , TRUTHS DISPROVEN BY FACTS. 

The teachings of Malthus, Ricardo, and their followers were 
based on inverted views. Malthus' conception was that of an 
insular pedagogue, who could not conceive the continuity of 
supply to be derivable from soils outside the narrow limits of a 
country, even if the soil of the country should not yield enough 
to supply the food for an increasing population. Indeed, economic 
writers indulge too frequently in the building up of an imaginary 
social creation. They show how society develops from an agri- 
cultural to a manufacturing community, how good soils are 
taken up first by husbandmen, that the poorer soils are taken up 
successively, and that rents represent only the excess, for a like 
expenditure, of the product of this land, over the product of the 
worst land cultivated in the same country. This theory, too, is a 
necessary outcome of the insular view, of an isolated existence, 
protected and fortified by corn-laws, of a view based on the immu- 
tability of vested rights and the unchangeable character of the 
social organism, the unchangeability of an organism which, if 
such a term is applicable, is the creation of change. The thouglit 
of every generation exercises its remodelling or destroying influ- 
ence on the social organism as handed down from a preceding 
generation. It would be useless to lose words on this subject. 
Others have ventilated it sufficiently. I have, in previous chapters, 
shown the utter inadmissibility of such discouraging teachings. 
With the battering down of all barriers put in the way of the free 
admission of corn, the cheapest fields of supply have come to the 
rescue of starving millions. The whole situation is reversed, since 
the price of land in Australia and America determines the land 
tenure in England. When American and Australian wheat can be 
landed in Liverpool at less than one dollar a bushel, paying the 
railroads and steamships, and the farmer on his free homestead, a 

141 



142 

profit, then it is useless to argue, whether rents are paid as the 
equivalent of the excess of earnings from good lands over those 
from poor lands, or whether they are paid on lands because they 
are nearer the market. The rent-collector will find his occupation 
gone when outside influences of the kind mentioned, determine 
the price of corn. Rent cannot be paid for land when free land 
comes in free competition with rent land. America, helping the 
English farmer and agricultural laborer to their ultimate libera- 
tion, however, has derived benefits from the free admission of her 
produce into England, which hitherto have hardly been recognized 
to their full extent. The value of an outside market for their 
surplus is hardly sufficiently appreciated by our agriculturists. 
Free trade in corn has given cheap bread to England's working 
people, and has contributed in making Great Britain the world's 
factory, but has besides raised the American farmer in comfort 
and wealth. The British price of corn was reduced and the 
American price was raised by the opening of the grain trade in 
England. Not so much as the shipping price is concerned, but so 
far as the money price is concerned which is paid on the farm. 
Forty years ago nearly the full value of a bushel of wheat would 
have been exhausted by freight charges from Ohio to the sea-shore. 
The railroad by opening the country to outside markets has 
made it possible to take the farmer's surplus to the shipping point 
at a minimum of expense. After paying the carrying expense, 
even under the influence of low export prices, he has still more 
left as his share than at the time when but few railroads existed. 
The railroads and steamships have thus become levellers of 
prices, supplying cheap bread to the toilers of America and 
Europe, and still proving to the farmer a great boon. The rail- 
road system of this country, and the great extension of steam 
navigation, would, however, never have found the great growth 
had it not been for the abolition of the corn-laws of Great Britain. 
Without the demand of foreign markets for our products, no one 
would have thought for a moment of building lines after lines of 
roads and steamships. By having an open market for the surplus, 
the grower of wheat, of corn, of pork, of agriculture products of 
all kinds, had gained a decided advantage over the manufacturer. 
The farmer, by finding a foreign market for his surplus, obtains 



143 

the full price for his salable products, less transportation expense, 
to the full extent of the foreign import price. The latter, by 
having all sorts of duties, or price increase, on his materials to 
bear, by means of custom-duties for protection, is debarred from 
obtaining relief through foreign commerce. Having to unload 
every thing on limited home markets, he has in times of depression 
to suffer all the ills which such an economic system entails on 
him. 

No better demonstration could be found of the great utility of 
open markets to the producer, than in a comparison of the relative 
positions of the agriculturists and the manufacturers in protected 
fields of industry, when burdened by over-supply and closed 
markets. 

OTHER FALLACIES IN SOCIOLOGY. 

We have, in this inquiry into fallacies of political economy, to 
meet one of not less importance than those alluded to above. 

Density of population has been considered as going hand in 
hand with increasing poverty. As a matter of course, it is inti- 
mately connected with the above doctrines. The whole economic 
philosophy of the time, slowly fading away, has been based 
thereon. But there is hardly a branch of the subject more 
clearly disproven by facts than this. Indeed, the development of 
our modern states prove the contrary. Not to speak of the older 
States of the United States, whose most densely populated sec- 
tions are not yet approaching to any European conditions, but 
Holland, Belgium, Great Britain, France, Germany, all have in- 
creased in population more in this century than the most sanguine 
estimates could have anticipated. Wealth, however, has vastly 
overreached the rapid growth of population, which has taken 
place within the last hundred years. The countries most densely 
populated count among the richest, while the thinly populated 
countries, countries possessing the richer soil and blessed by 
nature to a far greater degree, are the poorest. 

A statement of the estimated wealth of the principal countries of 
Europe shows this conclusively when placed side by side with 
population. I omit the value of forests and lands, as their increase 
in value is more due to other influences than wealth-creating ac- 
tivity. 



144 











No. in- 




Wealth, exclusive of 


Population. 


Rate per 


habitants 




Lands and Forests. 


Capita. 


per sq. 
kilo- 










metre. 


Holland .... 


$3,800,000,000 


4,000,000 


$950 


118 


United Kingdom . 


32,000,000,000 


35,000,000 


915 


109 


France .... 


25,000,000,000 


37,000,000 


676 


69 


Germany .... 


20,000,000,000 


45,000,000 


445 


79 


Belgium .... 


2,500,000,000 


5,500,000 


445 


185 


Spain 


4,500,000,000 


' 16,000,000 


280 


33 


Austria .... 


10,000,000,000 


38,000,000 


263 


59 


Italy 


7,000,000,000 


29,000,000 


241 


95 


European Russia . 


12,000,000,000 


75,000,000 


160 


13.7 



So far as fertility of soil is concerned, of that part of Russia 
which stretches from a line running from Warsaw and Moscow to 
the Ural Mountains southward, no other country could show bet- 
ter means of creating wealth. Not considering at all the northern 
part of Russia, but counting all her population into the southern 
half, her density would not be more than 27 against 109 of the 
United Kingdom, 118 of Holland, and 185 of Belgium, There 
would be room for 300 millions in the southern half of Russia to 
give the population the density of Holland, and for a sixfold in- 
crease of wealth to bring it up to the per-capita rate of Holland. 

If any thing were to be proven by such facts in the nature of a 
relationship of wealth and population, the exact opposite could be 
deduced from these figures. I do not, however wish to prove 
any thing of the kind, or set up a theory of my own. On the 
contrary, I wish to point out the fallacy of such reasoning as 
underlies our wealth theories. The utter irrelevancy of such doc- 
trines must be demonstrated, before we can commence to lay 
down more rational ideas about the causes which lead to the 
creation and the accumulation of wealth. 

Neither soil, climate, aspect of the country, rivers, density of 
population are of account if the one great spring of all blessings is 
wanting : security from aggression and freedom from restraint. 
The burden of poverty of states is self-imposed. Narrow selfish- 
ness has riveted the chains which hold men to poverty and want ; 
selfishness blinded by greed, not the clear-sighted selfish principle, 
but its baser aspect as represented by the robber baron's, '^ Stand 



145 

and deliver." Enlightened selfishness would understand, that the 
greatest good to all is the source from which the greatest benefit to 
the individual must arise. State-craft, making itself the tool of a 
class, of an interest, of a policy in the interest of a part, no matter 
how large, must necessarily detract from the happiness of the 
whole. Without these restraints put on labor, on capital, or exer- 
tion, every one exercises his fullest capacity to the bettering of his 
circumstances, and becomes the most formidable instrument in the 
creation of wealth. This principle, now carried out in proportion- 
ate degree only, explains the greater or smaller amount of wealth 
represented in our table of wealth of the different nations. A 
hundred years have passed since the great master of political 
economy uttered these memorable words : 

" The uniform, constant, and uninterrupted effort of every man 
to better his condition, the principle from which public and na- 
tional as well as private opulence is originally derived, is fre- 
quently powerful enough to maintain the natural progress of 
things towards improvement, in spite both of the extravagance 
of government and of the greatest errors of administration. Like 
the unknown principle of animal life, it frequently restores health 
and vigor to the constitution, in spite, not only of the disease, but 
of the absurd prescription of the doctor." (" Wealth of Nations," 
book ii., p. 141.) 

" The natural effort of every individual to better his own condi- 
tion, when suffered to exert itself with freedom and security, is so 
powerful a principle, that it is alone and without any assistance, 
not only capable of carrying on the society to wealth and pros- 
perity, but of surmounting a hundred impertinent obstructions 
with which the folly of human laws too often encumbers its opera- 
tions." ('' Wealth of Nations," book iv., p. 221.) 

Though neglected, even spurned, these great principles always 
come back with increased force after every practical attempt in 
the opposite direction. The most careful and painstaking inquiry 
cannot discover any other causes underlying the greater or smaller 
degree of prosperity, than in the neglect or practice to a greater or 
smaller degree of this great and broad principle under whose cover 
the material and ideal progress of the race finds shelter and am- 
plest room for development. Society is a living organism. Society 



146 

must find her own cures for all possible ills which may arise. But 
these ills will find least room to develop in the body, if treated 
like those of a healthy organism, instead of a sickly being always 
to be prescribed for and held under anxious and watchful nursing. 

Freedom, however, is not license. It is not understood, that 
the depressing and oppressing powers of government, against 
which the " Economists " of the last century put their energetic 
protest into their '' laissez faire, laissez passer " should be arro- 
gated by individuals or corporations. This powerful remonstrance 
was as outspoken against the fungi of that time, as against the in- 
terference of an absolute government with individual liberty of ac- 
tion. To limit these powers to a minimum must always continue 
to be the solicitude of government. It can never be classified 
among the prerogatives of a fraction, to rob the people at large of 
their common rights. The guaranty of the rights of the poorest 
individual is the essence of the free state. Where they are as- 
sailed, as a matter of course, the government's function begins. 
But even here care must be taken lest interference, except against 
actual violators of laws, should intensify the evil which is to be 
dealt with, or cause evils of far greater moment to arise. 

I will give an example in our railroads. No other agency, 
created by government, delegating its rights of eminent domain, 
has done so much to abuse a privilege and a trust as our 
railroads. 

Called into existence at a time when only the freest and fullest 
grants of rights and concessions could have induced the necessarily 
large investments, to embark into enterprises of a doubtful char- 
acter. The liberal rules then laid down became in most parts the 
framework of all future legislation. The State governments re- 
served but few rights. One of the leading principles was, that all 
customers were to be treated alike, that an excess of net earnings 
over a certain percentage was to revert to the State, etc. But how 
have they been abused ? 

Discriminations in freight rates have been carried to an extent 
that populous towns, remunerative enterprises, were ruined. In- 
dividual energy was paralyzed. Gigantic monopolies, fostered 
and fed by railroad favor, sprang up, destroying all competitors, 
who were rash enough to stand up against a most daring, un- 



147 

scrupulous foe. To charge whatever " the traffic will fetch " was 
the rule of all lines who had sole command of the field. Great 
earnings, far beyond the stipulated limit, led to fraud, to the in- 
vention of " construction accounts," into whose coffers the surplus 
was loaded. From there to the capitalization of earnings, to the 
watering of stocks, to the increase of capital share to double and 
treble the actual outlay. Wealth was created by the happy pos- 
sessors of the inner control to the extent of tens and hundreds of 
millions. Valueless stocks and scrips were by misrepresentations 
raised to par. Once tested, this easy way of pocketing the 
people's savings was resorted to in another way, namely, by de- 
pressing the value of stocks so as to make innocent holders sell 
out at a great loss. Then they were bought in. The next step 
was to raise their value again by fabricated stories of high earn- 
ings and misleading financial reports. Great as the loss was all 
the time to the honest, frugal individual who allowed himself to 
be caught within the meshes of the immense net, spread over the 
country, yet, strange to say, the gain to the whole people was 
greater. The projection and building of railroads became thereby 
the aim of those who were eager to get control of an inside line of 
their own. Doubtlessly this sordid greed caused more lines to be 
built in the short period of five years, from 1879 to 1883, than 
would have been laid on the soil in fifteen, had actual necessity 
and honest enterprise commanded their construction. The earn- 
ings of railroads in consequence of this duplication have sunk to 
a minimum. Many are bankrupt, others are on the verge of bank- 
ruptcy, and unless prevented by combination, competition between 
rival lines is becoming so keen, that net earnings are often entirely 
out of sight. But the people have a system of railroads which 
cannot be undone. All the sections are united. The vast agri- 
cultural stores of the country are carried to the sea-shore at so 
trifling an expense, that, as stated above, our own husbandmen 
are growing in prosperity, while Europe's great landholders 
tremble at the peaceful revolution wrought within a half a gen- 
eration. In all this I do not propose, but simply depose. I do 
not propose action or theory, but simply show that the free ex- 
ercise of competitive action, even when showing itself in its worst 
and most repelling features, is fully capable of working its own 



148 

cure, or at least of bringing out a compensatory advantage to 
society. 

THE FALLACY OF GREAT COMPETITION OF LABOR RESULTING 

IN SMALL EARNINGS. 

This theory is born by the wage-fund theory, that there is only 
a certain part of the capital of a country available for the re- 
muneration of labor, that wages are fixed by the ratio between the 
number of laborers and the amount of capital devoted to the em- 
ployment of labor. We have given sufficient space to the refuta- 
tion of this worn-out theory in Chapter XIII. Wages are paid, 
high or low, in proportion to the work that is in demand, be there 
an abundance or a want of capital, as in new countries. Wages 
are gauged by opportunities offered for work. That they do not 
depend on density of population, or even on the numbers seeking 
employment, or competition, when opportunities are plentiful, can 
be seen by comparing the state and composition of society in 
France in the XVII. century, and that of our own country in our 
own time. 

Vauban's tables, mentioned in a previous chapter, give us a 
statement of the composition of French society towards the end 
of the XVIL century, which I will introduce here for com- 
parison : 

Clergy ...... 266,000 

Nobility 250,000 

Privileged classes ..... 516,000 

Government employes, merchants, etc. . . . 2,300,000 

Peasants, farm laborers, etc. ..... 5,200,000 

Journeymen, mechanics, and laborers . . . 8,300,000 

Domestic servants ....... 2,100,000 

Beggars ......... 2,600,000 

19,000,000 

The number of offices created under the old regime was fabu- 
lous. They gave distinction, and were eagerly sought and paid 
for by the bourgeois classes. It is not too high to estimate their 
number — the army and navy, etc. — at 1,000,000. These, domestic 
servants, beggars, and the privileged classes, all non-producers, 
deducted from the total, leaves 12,800,000 as belonging to those 
engaged in useful occupations, or 65 per cent, against 35 per cent. 



149 

taken out of competition for employment in useful occupations. 
Domestic servants, of course, are a very useful class, but it will be 
readily understood that they do not come within our category. 
Beggars might have competed for employment, if they could have 
found it. But their existence to so large an extent shows clearly 
that the opportunities were wanting, and that they preferred a life 
of idleness and misery to a life of toil and misery, which was the 
rule of life of the working classes of the golden age. 

Our own population are all workers. A life of idleness is a 
source of annoyance to even our wealthiest people. They cannot 
endure if for any length of time, when withdrawn from active life, 
partly from habit, general example, and from a total absence of an 
idle class to lend companionship. 

In a nation of 17,000,000 of actively employed persons we have 

1,000,000 of domestic servants, 
60,000 clergymen, 
25,000 soldiers and sailors, 
115,000 employes of government, or 



1,200,000 



which can at all be called as standing outside of competition, or 7 
per cent, against 35 per cent, under the old conditions. Still with 
all this great competitive force, with all this fierce competition 
going on in this country, with all this great working force con- 
stantly employed or seeking employment, with all this absence of 
privileged classes, of army, clergy, and governmental supervisors 
of every man's action, wages are higher here than in any other 
country where these elements still exercise a powerful influence in 
reducing the active force of competitors for employment. But it 
is just this absence of idlers, this abundance of workers, which 
creates constantly new opportunities for employment. It is the 
absence of privileged classes, of armies, of navies, which increases 
the value of labor and of earnings. And above all it is the great 
freedom which we enjoy in regulating our internal affairs. It 
seems almost useless to reassert here, that with such facts before 
our eyes as the results of freedom, it is almost a thing beyond 
comprehension that we have not extended as yet the great theory 
of freedom into the laws governing our external affairs. 



CHAPTER XVI. 

APPLICATION OF GENERAL FACTS TO OUR INDUSTRIAL SITUA- 
TION. 

The following we may set down as prominent characteristics 
of American industrial life : 

1. Great productiveness of labor in general. 

2. Universal application of machinery. 

3. Profuseness of production, necessarily requiring great con- 
sumption and an unrestrained outlet for the product. 

Unless this is obtained production will become depressed, 
which means that the standard of living of the working classes 
will become reduced, and labor as well as capital lose its pros- 
perity in the competitive struggle for existence. The abundance 
of our public lands has so far acted as a safety-valve. Without 
this natural blessing the pressure would before this have become 
far more intense. The pressure of limited markets upon our pro- 
ductive forces would have become unbearable. But even now, 
with vast areas of unsettled lands, the danger-line is drawing 
nearer and nearer. The unemployed classes find it more difficult 
to obtain land upon their terms, except in localities which lie out- 
side of their means of reaching them. If anywhere, here is the 
rightful domain of government to exercise its powerful influences. 
Land is the first and most prominent regulator of the price of 
labor. Its accessibility to the working classes secured on easy 
terms under a free government, every other problem will find its 
own solution. The overabundance of our labor finds its most 
profitable field there, when our artificial commercial system con- 
demns vast armies of able workingmen to enforced idleness. The 
overabundance of our industrial products finds an increasing 
market in turn, when this surplus labor has found its permanent 
resting-place again. Then in return a growing demand arises 
from lessened production in industrial branches and increasing 

150 



demand from extended agricultural centres, which demand cannot 
be filled at once, and we have the " boom." This has happened 
now three times in periods of seven to eight years during the last 
twenty years under our present fiscal system : Two to three years 
of great demand and high prices, followed by four to five years of 
decline and fierce competitive war among ourselves. We could 
turn our energies to more fruitful and less mortifying struggles if 
we were permitted to turn them upon foreign prey. The situation 
would be changed at once if we were permitted to trade with a 
thousand millions of people, instead of fifty-six millions, upon 
equal terms with other nations. This we cannot do successfully 
as long as there is a tax upon our raw material. 

The labor-cost of American work is so small an item now in the 
construction of any article, that it is great negligence on the part 
of our legislators to continue in force statutes that tend to increase 
the price of materials of manufacture. To obtain markets under 
those conditions is possible only by pressing down the earnings of 
working people and of their employers. Both have to suffer, 
either through intense pressure of home competition or through 
reductions necessary to counterbalance the higher cost of ma- 
terial, if they seek foreign outlets for the product of their skill and 
energy. Take for example the clock manufacture in America. 
Every thing pertaining to the complex structure of a clock is done 
on the same premises, even to the making of the machinery which 
is used in turning every part of the work from the raw material 
into its proper shape for ultimate use in a clock. The raw material 
used is pig-iron, block-tin, and copper, lumber, etc., — in short, the 
crudest forms in which materials are known to the trade. The 
rapidity of work, the quantities turned out by comparatively little 
labor, alone explains that very sightly clocks are made and sold at 
a dollar apiece, of which the direct labor-cost does not exceed 
twenty-five cents, perhaps. As a great part of their goods is sold 
abroad, it follows that the labor employed by these works at the 
highest rates ruling in the United States ($550, according to the 
census of 1880, while the general average of factory labor is only 
$350 a year) has to find markets in competition with European 
labor, which does not earn one third as much per day. Excepting 
lumber for the frames, perhaps there is not a dollar's worth of 



152 

material used in the construction of these goods which could not 
be bought at eighty cents, and from that down to sixty-five cents, 
by any German, Swiss, or English concern with whose products 
Americans have to compete in the world's markets. The same 
could be said about our sewing- and other machines, tools, imple- 
ments, fence-wire, and so forth. 

I have lately visited one of our Eastern shoe-factories, and ex- 
amined the numberless details of work through which the materials 
have to go, until the last finish is put on a very graceful pair of 
lady's button-boots. Excepting the cutting of the pieces, every- 
thing is done by machinery, even to the sewing on of the buttons, 
one of the latest Yankee inventions. The combined cost of the 
many operations does not exceed the sum of thirty cents. The 
factory price per dozen is $15, or say, $1.10 net per pair. This 
includes packing expenses (wooden case and a paper box in which 
each pair is packed). They are retailed probably at $1.75, and 
are good, solid, honest leather goods. No pastework. The earn- 
ings of the operatives are the average paid for this kind of work, 
and certainly twice as high as paid in England or anywhere in 
Europe. As every thing is piece-work, the operatives can earn 
high wages only when they possess an amount of efficiency and 
skill, which are acknowledged characteristics of Eastern opera- 
tives, male or female. The degree of intelligence and nerve 
power which the faces of the operatives show would hardly be 
found in any factory outside of America, and is the only answer 
we can give to the oft-repeated question : How if other nations 
adopt our methods ? Many an English shoemaker, attracted by 
the high earnings of operatives in American factories, had to give 
up the contest, as he could not earn half the wages of an American 
with the same tools and in the same factory. 

But other nations are slow to adopt our methods. The Berlt?ier 
Tageblatt of September, 1884, in a long editorial, gives vent to its 
astonishment at the exposition of an " iron shoemaker " — " der 
eiserne Schuhmacher " — at the Industrial Exposition of Vienna. 
The writer dwells upon the fact that there are 250,000 shoemakers 
in Germany, and that the introduction of machine-shoemaking 
would displace certainly 200,000 shoemakers, and he consequently 
deprecates the innovation. 



^53 

Now I will not disparage on Germany's great advantages. Her 
future is as full of promise, as her remoter past, dealt with in a 
previous chapter, has been great in the fields of enterprise, culture, 
and labor. With a studious, painstaking mind, assisted by insti- 
tutions of learning in the fields of technology as well as in other 
sciences, unsurpassed and unequalled by any nation, her employ- 
ing classes eagerly push to the foreground. None are more eager 
students of our practical lessons than the Germans. In the shoe 
industry her manufacturers come over here, to learn and study 
our system. Only last summer one of them came over to work 
his way through a shoe-factory in Lynn. When I asked of a Lynn 
manufacturer why they were not more guarded in imparting the 
secrets of their trade to foreigners, he answered : " They cannot 
do us any harm. If we had our materials free, and they had all 
our machinery, we could beat them yet with all their cheap labor." 
Continuing he said : " The trouble with the Germans is, they 
don't give their labor a fair show. When they introduce machin- 
ery by which they save in the cost of labor, they right away go to 
work to cut down the wages. This takes all ambition out of the 
work, and the result is that they get little ahead. One concern in 
Koburg has begun to work on a more liberal principle, encour- 
aging high earnings, with very satisfactory results." 

We find the great practical bearing of this lucid expression of 
the true philosophy of wages fully corroborated by ocular proofs. 
Man must see a chance before him, to work his way upward, if he 
is to employ his capacity to its fullest extent. There must be 
elbow-room. Fully used to this, American workers, placed side by 
side with European, show soon enough that they are made of dif- 
ferent metal. I will give an extract from a recent article of Prof. 
Dieffenbach, one of the highest German authorities on technical 
education, in illustration. He says : 

" More surprising still is the influence of North America upon 
handicrafts, and especially on the whole domain of mechanical 
technology. Here there is still a very wide difference between 
Germany and the United States. While our chemical technology 
has been distinguished by extraordinary advances, in consequence 
of which our chemical manufacturers have recently conquered a 
multitude of new markets, our mechanical technology has not 
developed at the same rate. 



154 

" There is a striking difference between the every-day require- 
ments of the mechanical trades in Germany and America. Com- 
paring the tools of the American mechanic and the German, we 
find the difference about as great as that between our axes and 
hammers and the axes and hatchet of the stone age. By means 
of an excellently arranged collection, originated by Privy-Coun- 
cillor Dr. Hartig, Professor of Mechanical Technology, the Royal 
Polytechnic Institution at Dresden has made an intelligent exhi- 
bition of the gradual evolution of tools used in working wood, 
stone, and metals, in spinning and weaving. In this collection the 
oldest forms attainable are exhibited side by side with the newest, 
generally American, forms. These latter are not only distinguished 
by superior elegance and finish, but are handier and more reliable 
in their work. It is true that this juxtaposition of widely diver- 
gent forms is not meant to convey the opinion that the new are 
preferable in every respect, but to lead beholders to reflect upon 
the possibility of improving the forms hitherto clung to with great 
tenacity in our workshops, and to show them that such improve- 
ments, both in durability and effectiveness, can in many cases be 
accomplished at but slightly increased cost. In many things the 
United States may serve us as a pattern, and we feel sure that the 
example given us will not fail to be imitated in the Old World. 

" Sewing-machines, as well as machines for boring, lifting, and 
sawing, were first given a more practical construction, first brought 
to perfection, in America. America brought about a complete 
evolution in the manufacture of leather, the most important after 
iron. There new and better tanning materials were first intro- 
duced, and there, too, new animal textures adapted to tanning 
were discovered, — as, for instance, the skin of the alligator and 
crocodile, which has so quickly won popular favor. There, too, 
leather was first split, and the splitting-machine is an American 
invention. But, above all, America started a revolution in shoe- 
making, which is now being carried out in the Old World. It 
embraces the tools used by the ordinary shoemaker, as well as 
machinery. Among the tools, we mention the edge-trimmer, 
Dunham edge-trimmer, polishing irons, polishing wheels, and 
heel-shave. 

" What an American workman is able to accomplish by means of 



^55 

these tools, may be seen by an example. The writer of this article 
spent a portion of 1878 and 1879 in Leipsic, where he became 
acquainted with a manufacturer of boots and shoes. One day an 
American applied for work ; he stated that he had come to Ger- 
many on account of his son, who had a talent for music, and 
whom he wished to have educated at the Conservatory. He said 
that he was looking for work in order to pay his son's expenses, 
and he desired to be allowed to use tools that he had brought over 
from America. The manufacturer agreed. Now, the American 
appeared at his place daily, looked neither to the right nor to the 
left, but attended to his work to the last stroke of the bell. The 
manufacturer soon noticed that he had obtained a man fully equal 
to the German hands in thoroughness and skill, and capable of 
turning out three to four times as much as any other, thanks to 
his exemplary diligence and his American tools. Wages being by 
the piece, the man earned more than enough to support himself 
and his son. 

" In addition, we are tempted to remark that the American self- 
made man appeared to great advantage. A German family that 
discovers a pretty voice or some other musical talent in one of the 
children, does not feel called upon to provide for the cultivation of 
such gift. It petitions for a scholarship ; it begs the sovereign 
and wealthy patrons of art for assistance, and believes it to be the 
duty of all lovers of art to help along the wonderful child, which 
might, nevertheless, one day do itself and the world better service 
by plying the needle or knitting stockings. Among us, in Ger- 
many, great sums of money are spent every year in the education 
of so-called artists, and yet the expenditure is simply and abso- 
lutely so much money wasted. What did the American working- 
man think and do ? He regarded the education of his son as a 
speculation. I shall, he thought, work a few years longer ; I shall 
work harder, if need be, but if I am lucky I shall have no cares in 
my old age, and be under obligation to nobody." 

In this generous recognition of the American's worth. Professor 
Dieffenbach touches the main-spring of America's success. It is 
a gift from within^ not from without. The American knows that he 
is the maker of his own destiny. He aspires to the highest. Free- 
dom from restraint has developed the highest type in America. 



156 

With such productive powers at our command, with the labor- 
cost reduced to so trivial a sum, the cutting-down process resorted 
to by manufacturers, as a means of stemming the ruinous tide of 
competition, is absolutely superfluous. It does not alleviate the 
evil ; it intensifies it. It cannot make American markets consume 
more product. It cannot give us foreign markets, so long as our 
materials are heavily taxed. Our labor, assisted by machinery, is 
so efficient and cheap now, that with free materials we could 
advance our labor price, and still be able to undersell European 
labor in any of the neutral markets of the world. We could add 
to the yearly earnings of our toiling millions many a week's, nay 
month's, employment beyond that offered by our circumscribed 
markets at home. By opening foreign markets to the products of 
the toil of our workers at home, and thus increasing their earn- 
ings, we should create the most lucrative colonies that any nation 
has had in the history of the world. 



APPENDIX TO CHAPTER VI. 

The report of the Chamber of Commerce of Crefeld, just pub- 
lished^ shows clearly that very little change has taken place as yet 
in the industrial system of the German centre of silk manufac- 
ture. 

The average number of weavers and looms employed during 
the years 1882, 1883, and 1884 were as follows : 





1882. 


1883. 


1884. 


Velvet and plush, hand, 


17,812 


21,770 


22,085 


" ♦' " power 


299 


651 


1,018 


Velvet ribbons, hand . 


541 


1,003 


484 


" " power . 


72 


159 


68 


Silks and satins, hand . 


16,425 


12,690 


12,987 


" " " power. 


400 


657 


893 


Cut ribbons, hand . . 


58 


80 


\ '° 


" " power . . 


25 




Totals 


35,632 


37,010 


37,605 



The advantages derived from the employment of hand-looms in 
the silk industry are manifold. One of great importance in price- 
making is the employment of cheaper kinds of silk, while the 
power-loom requires the best and most expensive grades. This, 
and the greater facility of changing looms to suit the manifold re- 
quirements of fashion, the greater ability of the manufacturer to 
regulate his production according to the demand, and thus putting 
the burden of depression upon the workingman instead of carry- 
ing the greatest share himself, as is the case with owners of power- 
mills, may be given as correlative reasons for the slow progress 
which the power-mill has made in Europe in the silk industry. 

157 



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